JSK and Clifford Chance Advise on APS Agreement with Hellenic Bank of Cyprus for Management of Real Estate Assets and Servicing of NPLs

JSK and Clifford Chance Advise on APS Agreement with Hellenic Bank of Cyprus for Management of Real Estate Assets and Servicing of NPLs

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JSK has advised APS Holding a.s on its January 10 agreement with the Hellenic Bank Public Company Ltd for the management of real estate assets and for the servicing of the non-performing loans of the Bank. Antoniou McCollum & Co advised APS on Cyprus law matters. Clifford Chance advised the Hellenic Bank, with George Z. Georgiou & Associates advising it on employment law matters and Antis Triantafyllides and Sons on Cyprus Law matters.

According to an APS press release, "the completion of the transaction is subject to applicable approvals and clearances from the relevant regulatory and any other authorities and is targeted to be achieved by the end of the first quarter of 2017. This transaction clearly falls within the direction indicated by the ECB guidance issued to Banks for the work-out of non-performing loans, and it is considered by Hellenic Bank as the most appropriate NPL strategy aimed to decisively address the issue. Additional details of the agreement, including the commercial and financial terms, are expected to be announced by the end of the first quarter of 2017, upon finalization of the transaction.

According to JSK, "APS is a leading company in investment, management, and recovery of loan portfolios and real estate within Central and South-Eastern Europe. The company is headquartered in Prague, Czech Republic, where it was founded in 2004. APS provides comprehensive services in distressed and performing loans portfolios investment advisory and recovery management, and also performs asset management. Involving more than 600 experts, it provides services in 10 European countries: Bulgaria, Croatia, Cyprus, the Czech Republic, Montenegro, Poland, Romania, Greece, Serbia, and Slovakia. APS manages assets totaling in nominal value more than EUR 4.4 billion and provides exclusive investment advisory to four investment vehicles and recognized institutional investors."

The Hellenic Bank Group commenced operations in 1976 and is one of the largest banking and financial institutions in Cyprus. It enjoys a network of over 60 branches in Cyprus, and employs 1400 people in the country.

For the purposes of the January 10th agreement a new company will be established in which the Hellenic Bank will have 49% of shares and APS Recovery Cyprus Ltd will own the remaining 51%. The operations of the current Arrears Management Division of the Bank will be transferred to the new company, including the necessary resources to carry on its work independently, in exchange for a positive consideration.

The new company’s management consist of Hellenic Bank’s staff, including its Chief Executive Officer, Kiki Papadopoulou, who currently holds the position of Group General Manager Arrears Management Division. About 160 employees of the Arrears Management Division of the Bank will also move to the new company.

The Bank will retain the ownership of the portfolio of non-performing exposures and the real estate assets. It is anticipated that a portfolio of non-performing loans of about EUR 2.4 billion will be serviced by the new company upon establishment.

APS Head of Legal Tereza Simanovska said: “We are pleased to have successfully signed the transaction and improved our position in the South Eastern Europe region. Together with Hellenic Bank we are going to introduce the largest debt recovery platform in Cyprus. JSK has provided us with valuable advisory services leading to a successful entry into the Cypriot market.’’

The JSK team was led by Of Counsel Nick Johnson, who said: “This was a groundbreaking transaction for the Cyprus banking market. APS have now entered yet another jurisdiction, as their influence and importance continues to grow in the region. We were very happy to help them with this important project.”

Johnson's team included JSK Partner Tomas Dolezil and Senior Associate Michal Jendzelovsky.

The Antoniou McCollum & Co. team advising APS in Cyprus consisted of Christina McCollum and Anastasios Antoniou.

The Clifford Chance team advising the Hellenic Bank consisted of Madrid-based Partner Carlos Portocarrero and Associate Andres Berral and London-based Partner Emma Matebalavu and Associate Laura Smith.

The Antis Triantafyllides and Sons team advising the Bank in Cyprus consisted of Emily Petridou and Marios Hadjigavriel