Commerzbank Sells Nine Ships as Asset Disposals Speed UpShane Strowmatt
Commerzbank AG, Germany’s second-largest lender, said today it agreed to sell nine container vessels in an effort to redeem loans, three weeks after stepping up plans to divest of unwanted assets.
The proceeds of the sale will be used to redeem around $216 million of loans, Commerzbank said in an e-mailed statement today. The lender said August 7 it will cut total unwanted assets to about 67 billion euros ($88 billion) by the end of 2016, less than a previous target of 75 billion euros, with commercial real estate and shipping assets to be reduced to about 20 billion euros in the same period.
“This transaction is the second successful capital markets portfolio transaction in Deutsche Schiffsbank unit within the space of one year, and this despite an ongoing difficult market environment in the international shipping markets,” said Stefan Otto, divisional board member of NCA Deutsche Schiffsbank, the Commerzbank division dealing with the sale of unwanted shipping assets, in the statement.
Commerzbank is increasing lending to German consumers and companies while winding down shipping and real estate assets. The lender’s finances are under scrutiny by the European Central Bank, which is reviewing balance sheets of the region’s biggest lenders and conducting stress tests before taking over as their supervisor in November.
The sale announced today will transfer Commerzbank loans to a joint venture of KKR & Co.’s KKR Special Situations Group and Borealis Maritime Ltd., and reduce non-performing loans in the bank’s container segment of the non-core unit by about 8.4 percent, according to the statement.
The bank held 92 billion euros of unwanted assets as of June 30, which includes shipping and commercial real estate loans as well as public debt.
Commerzbank sold 14 chemical tankers in December to a fund managed by Oaktree Capital Management LP, eliminating 280 million euros in bad shipping loans from its books.