Opera sgr is launching a new turnaround fund, named Fondo Valorizzazione Imprese, aiming at acquiring bad SMEs loans versus 20-30 Italian SMEs from medium-size Italian banks for a real average value of about 20 million euros for each SME, MF-Milano Finanza wrote yesterday.
The project, studied by Opera sgr’s chairman, Michele Russo, consists then in an debt-to.equity swap of the acquired loans in order to rebalance the financial situation of the companies in the portfolio and allow the fund to intervene in the management of the company in order to resume the business. As for the banks, they will receive stocks of the new fund of type A in exchange of their loans while the fund will be capitalized by new cash from Italian and international institutional investors so that the fund will have total assets for 350-500 million euros.
NAV of the fund will be in line with the sale price of the loans which in turn will be in line with the balance sheet value of the loans on the banks’ financial statements after devaluations. The banks will be allowed than to derecognize the credits and free regulatory capital. Moreover as the portfolio companies will resume their business the fund will be able to earn from the deals as well as its investors, previous lenders included.
Opera sgr has been maturing a good experience in turnaround businesses and insolvencies procedeeings in the last few years after it bought the entrie portfolio of funds previously managed by Cape Natixis sgr. There were 29 comnpanies in the portfolio, most of them with serious problems to be dealt with.