EAA Portfolio

EAA: WestImmo’s share purchase agreement signed

  • Wind-down portfolio reduced by approx. EUR 10 billion
  • Sale will have a positive impact on the 2015 results as well as the wind-down success of the EAA

Erste Abwicklungsanstalt (EAA) has successfully divested its entire share capital in Westdeutsche ImmobilienBank AG (WestImmo) which it took over from former WestLB in 2012: The share purchase agreement between EAA and Aareal group was signed today. The final transfer of the shares (closing) will take place as soon as all closing conditions have been fulfilled, e.g. regulatory approvals. “The WestImmo sale is a milestone for EAA’s portfolio wind-down. I am particularly satisfied that we managed to sell WestImmo in its entirety as this provides a viable perspective for the institution’s employees”, stated Matthias Wargers, CEO of EAA headquarted in Düsseldorf.

The sale of the Mainz-based Real Estate lender will reduce the loans and securities in EAA’s portfolio by approx. EUR 10 billion compared to year-end 2014. This amounts to approx. 20 percent of EAA’s current banking book. The purchase price will have a positive effect on EAA’s result in FY 2015 as well as its long-term wind-down plan. All upsides and risks remain with EAA until closing. Prior to the WestImmo sale, EAA undertook considerable restructuring measures. According to Mr. Wargers, EAA extracted an amount of significantly more than EUR 800 million since it took over WestImmo. “This sum by far exceeds WestImmo’s book value at the time EAA took over the bank in 2012”, stressed Mr. Wargers.

Furthermore, the sale will provide additional benefits: The complexity of the overall portfolio will decrease, thus reducing EAA’s operational and economic risks in connection with winding-down its portfolio. The share purchase agreement stipulates that all of WestImmo’s refinancing obligations vis-à-vis EAA will be repaid and all financial guarantees provided by EAA for WestImmo portfolios will be cancelled at closing. “The transaction considerably accelerates our de-risking. This is excellent news for our public sector guarantors and ultimately for the taxpayer”, Mr. Wargers explained. Moreover, EAA considers the timing of the sale as ideal: Although WestImmo contributed considerable profits to EAA, WestImmo as an EAA subsidiary is still subject to new business restrictions imposed by the EU, such that a sale of WestImmo yields a positive effect for EAA as opposed to a wind down.