Greece's NBG nears deal to sell property unit-sources

Reuters

* Invel Real Estate to buy about 66 pct of NBG's Pangaiaproperty unit

* Deal to be partly financed by NBG

* NBG to retain management for 5 years

By George Georgiopoulos

ATHENS, Nov 17 (Reuters) - National Bank of Greece, thecountry's largest lender, is close to clinching a deal to sell amajority stake in its fully-owned real estate arm Pangaia toprivate equity firm Invel Real Estate, two bankers close to thedeal told Reuters on Sunday.

The sale is part of restructuring efforts by National Bank(NBG) aimed at boosting its capital base.

Greece's top four banks are implementing restructuring plansagreed with the European Commission as part of conditionsimposed for their bailouts. The plans involve job cuts, branchclosures and asset sales.

"The agreement will close in the next 10 days. Invel willacquire about 66 percent of Pangaia for more than 600 millioneuros ($808 million)," one of the bankers said.

Invel will pay part of the purchase price for Pangaia incash, contribute equity in the form of real estate and financethe rest with a loan from National Bank, the bankers said.

Dutch-based Invel was set up in March 2013 to take advantageof opportunities in the European real estate market by offeringinvestors the ability to co-invest in deals.

BSG Real Estate, controlled by Israeli businessman BenySteinmetz, will be one of the co-investors in the transaction,the bankers said.

"NBG will retain management control at Pangaia for fiveyears," the other banker said. "The loan by NBG for part of themajority stake will be at a spread of 275 basis points, securedby real estate contributed by Invel."

The bankers said the sale would strengthen National Bank'sCore Tier 1 capital adequacy ratio by 40 basis points to 9.6percent. The Bank of Greece plans to conduct stress tests laterthis year.

Pangaia's real estate portfolio includes office buildings,branches operated by NBG and other property recently acquiredfrom the country's privatisation agency.

Pangaia may pursue a listing on the Athens stock exchange by2015, one of the bankers said.

The agreement has been approved by the Hellenic FinancialStability Fund (HFSF), the bank rescue vehicle thatrecapitalised the country's big four banks in the summer and isnow their major shareholder, one of the bankers said.

Last month, Canadian firm Fairfax Financial Holdings announced its intention to raise its stake in Greekreal estate firm Eurobank Properties.

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