KKR to manage €1.2bn Greek NPLs

Alpha Bank and Eurobank have assigned the management of a number of under-performing assets to KKR’s Pillarstone credit vehicle.

Two of Greece’s largest investment banks, Alpha Bank and Eurobank, have assigned the management of a number of under-performing assets to KKR’s credit platform Pillarstone.

The European Bank for Reconstruction and Development (EBRD) is considering investing in the platform and is expecting approval from its board on 6 July. It is aiming to invest a total of €50 million into the platform.

A spokesperson for Eurobank said that the initial portfolio comprises of exposures at a nominal cumulative value of €1.2 billion, but it is open to other lenders contributing loan portfolios and banks adding existing exposures in the future.

Pillarstone will provide liquidity to a number of under-performing assets in the Greek economy. The injection of long-term capital is intended to assist in stabilising the companies and aid them in future growth, according to a statement from the banks. Both banks will profit from the recovery of the businesses covered by the portfolio.

The platform assesses the assets on a case-by-case basis and implements a turnaround plan specific to that company. Similar to KKR’s Pillarstone Italy operation launched last year, the Greece-focused vehicle will work with companies in real estate, shipping and corporates. Parties involved in the transaction declined to disclose the identity of the Greek companies involved in the transaction.

HSBC advised Alpha Bank on the deal, while Mediobanca advised Eurobank.

Theodore Athanassopoulos, executive general manager of Alpha Bank, said: “The platform aims to provide viable Greek corporates which encounter financial difficulties the chance to have access both to liquidity and operational expertise that will help them invest, grow, recover and create new job opportunities.”

Johannes Huth, head of KKR Europe, Africa and Middle East, said: “Pillarstone presents an innovative and timely solution to banks across Europe in managing specific underperforming exposures.”

The latest agreement is a further expansion of KKR’s Pillarstone platform. It operates in Italy, where the vehicle works with local banks UniCredit and Instesa Sanpaolo to manage their exposure to non-core and underperforming assets in the region.

Last month, Pillarstone confirmed an agreement with the listed shipping group Premuda. The platform provided capital to strengthen the management’s plan to reverse the company’s fortunes.

KKR said its Pillarstone platform is considering entering into other markets across Europe, although it did not disclose any details on its search.