Commerzbank has signed an agreement with a buyer and the owners of nine container vessels financed by the bank on the sale of the ships. The proceeds from the sale will be utilised for the redemption of loans with a total volume of approximately 160 million euros (216 million US dollars). The total portfolio is being transferred in full to the buyer, a joint venture company founded by KKR Special Situations Group of Kohlberg Kravis Roberts & Co.L.P. (USA) and Borealis Maritime Ltd. (UK); no financings will remain with Commerzbank. Confidentiality has been agreed upon further details of the contractual agreements.
Through the sale of this portfolio of smaller container vessels the risk profile in the Non-Core Assets (NCA) Deutsche Schiffsbank division is being further improved. The volume of non-performing loans in the container sector has thus decreased since the end of June 2014 in the Non-Core Assets (NCA) Deutsche Schiffsbank division by approximately 8.4 per cent. 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 NCA Deutsche Schiffsbank. As recently as December 2013Commerzbank had sold a credit portfolio encompassing 14 chemical tankers.
The transaction does not have any material impact on the income statement of the NCA segment in the third quarter of 2014. With the transaction Commerzbank is moving forward with the value-preserving reduction in the NCA segment. In the framework of the run-down strategy of the NCA segment, in the first seven months of 2014 it was possible in addition to natural credit maturities to sell a total of approximately 70 ships through individual transactions with a total credit volume of approximately 530 million euros. These transactions are testimony to the ongoing high run-down velocity of the Ship Finance portfolio, said Otto.