Italian Cerved says talks with Intrum halted due to coronavirus
MILAN, March 21 (Reuters) – Italian financial group Cerved said on Saturday that talks to sell its debt collection arm to Europe’s largest loan collection firm, Intrum, had failed due to the outbreak of coronavirus which is devastating the Italian economy.
The Italian government expects gross domestic product to decline 3% this year after imposing a nationwide lockdown to tackle the virus, which has killed more people in Italy than in any other country.
Intrum Italy and Cerved entered into exclusive talks in mid-February days before the virus emerged, which has since killed more than 4,000 and infected at least 47,021 people.
Cerved said in a statement that an exclusivity period granted to Intrum Italy expired on March 20 and talks were halted due to “the current economic and financial situation attributable to the COVID-19 epidemiological emergency.”
Sources had said that Intrum Italy had offered more than 450 million euros for Cerved’s bad debt collection unit.
The deal was seen as the first major consolidation move in Italy’s bad loan sector, where growth was slowing after a boom driven by large-scale sales as banks cleanse their balance sheets of the legacy of recessions. previous ones.
Cerved had considered a possible sale of its bad debt unit after the early termination of a collection contract with Monte dei Paschi di Siena bank in order to focus on its credit data business.
Italy’s new economic slump is expected to trigger a further rise in unpaid debts, while also making it harder to collect existing problematic loans.
A spokesperson for Intrum Italy declined to comment, referring to a statement from Intrum on March 13.
The Swedish group said the coronavirus emergency prompted it to reduce its investment levels and increase the required rate of return on new investments, adding that it was reviewing ongoing merger and acquisition plans and giving priority to a share buyback.
Intrum said it expects a cash flow delay in Italy, where the courts have closed. He said he had taken “comprehensive measures to ensure that we are able to conduct our business as usual, to the extent possible”.
Italy in 2019 represented 4% of total Intrum cash income before interest, taxes, depreciation and amortization. (Reporting by Valentina Za Editing by Helen Popper)