Banco Popular puts €30bn of toxic assets in the shop window

Oliver Gill
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Banco Popular was bought by Santander for €1 in June (Source: Getty)

Spanish lender Banco Popular has revealed plans to offload around €30bn (£26bn) of toxic assets as it seeks to bolster its balance sheet.

In a statement overnight the new chair of the board of directors Rodrigo Echenique said Popular would seek partners for the assets.

It was under the weight of such risky assets that Popular was bought by Spanish rival Santander for a nominal €1 in June.

Morgan Stanley beat investment banking rivals to the adviser mandate for the asset sale. New owner Santander has set itself an 18-month window to reduce the volume of bad debts by half. It wants the assets off its balance sheet completely within three years.

Read more: Banco not so Popular among bondholders: Legal action explored

Meanwhile, Popular said it would buy back 51 per cent of Aliseda Servicios, which carries out real estate servicing, from the funds Varde Partners and Kennedy Wilson by the third quarter of 2017.

The agreed price for the stake was €180m and will entail a capital consumption for Banco Popular of €302m, the bank said.

Yesterday morning a group of Banco Popular bondholders announced it is exploring taking legal action over the fate of the Spanish lender.

Pimco, Anchorage, Algebris and Ronit Capital, have engaged law firm Quinn Emanuel Urquhart & Sullivan LLP to explore their litigation options.

Read more: Santander to take over Spain's Banco Popular

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