Norddeutsche Landesbank Girozentrale, or NordLB, is in exclusive negotiations to sell its remaining €3.9 billion portfolio of nonperforming shipping loans to U.S.-based Cerberus Capital Management LP, Reuters reported Dec. 18, citing sources familiar with the matter.
The talks come as the German public sector bank negotiates a potential investment of about €3.5 billion from Cerberus and its rival Centerbridge Capital Partners LP.
The deal for the nonperforming shipping loans portfolio is subject to NordLB striking a deal to sell a stake in the bank in February 2019, in a bid to strengthen its balance sheet and cover write-downs on the value of any loans it sells, the sources told the news outlet.
The German public sector bank has been looking to off-load its entire portfolio of nonperforming shipping loans in 2018. Landesbank Hessen-Thüringen Girozentrale is no longer part of the formal auction process for NordLB. However, talks are still ongoing between stakeholders of the two companies over the possibility of a public-sector solution, Reuters reported, citing the sources.
Other options being evaluated are a sale of NordLB's business with German municipally owned savings banks as well as a divestiture of its retail banking unit Braunschweiger Sparkasse, one source noted.