Blackstone will provide a structured vehicle that will own and manage about 60 per cent of the debt tied up in the portfolio, with RBS retaining the majority share of the remaining equity under the terms of the deal, reports have suggested.
The £1.4bn sell off was reported earlier this year, but Sach has now confirmed to Insolvencynews.com that investors other than private equity firms, including hedge funds, have expressed interest.
It is thought RBS will offer more of the portfolio, which comprises mostly distressed loans in the bank’s non-core arm, to other investors in the future.
In the meantime the structure of the agreement will allow RBS to retain a share of future profits and avoid a hit on its balance sheet from selling at a lower price.
The deal has been provisionally agreed and is awaiting sign off from the bank’s senior executives, it is understood, and follows protracted negotiations with private equity firms and other investors.
It marks the first deal struck under the bank’s “Project Isobel” initiative, which is geared specifically at offloading non-core property assets.
Derek Sach, global head of restructuring at RBS, told Insolvencynews.com that RBS is currently exploring other markets to sell different packages of assets as it looks to offload its entire non-core portfolio by the end of 2013.
An exclusive interview with Derek Sach will feature in the August/September issue of Insolvency Today.
Both RBS and Blackstone declined to comment.