KA Finanz’s Sale of Greek Loan Portfolio

KA Finanz AG is the wind-up entity of Kommunalkredit Austria AG, a bank focused on infrastructure and energy.

KA Finanz AG is the wind-up entity of Kommunalkredit Austria AG, a bank focused on infrastructure and energy, which was nationalised and re-privatised during the past decade and which originated the loans.

The transaction involved English, Austrian, and Greek law, and due to legal and other considerations, physically took place across multiple jurisdictions, including Greece, Austria, Serbia, the UK, and the US.

The transaction was led by Denise R Hamer, Head of C/SEE Asset Solutions, with the support of Branislav Marić, Managing Partner of the Belgrade office, and Senior Associate Tijana Arsenijević.

 

An Interview With Denise R Hamer, Head of C/SEE Asset Solutions, Kinstellar

What complications arose with the variety of jurisdictions and their respective laws being involved in this transaction?

The Sale and Purchase Agreement was governed by English law. The sold loans were governed by Greek law, which requires that a licensed entity act as a lender or beneficial owner; KA Finanz AG, governed by Austrian law, acted in such role on behalf of a US-based fund, subject to certain US laws.  It took some time to identify an appropriate buyer that would meet the various relevant jurisdictional legal and regulatory requirements.  Once this was finally accomplished, we were well into COVID, with its attendant complications.  Documents needed to be notarised and apostilled in various jurisdictions with partially closed notaries and courts; the assignment of the portfolio needed to be certified in person using such notarised and apostilled documents which needed to be delivered on erratic flights to the partially closed Athens Registry; and the ultimate buyer, Piraeus Bank SA, needed to perform all of its requisite acquisition activities, such as creating payment accounts and sending hello/goodbye letters to borrowers, with a rotating staff.   As well, we worked in multiple languages of English, German and Greek.  KA Finanz, being the wind-up entity of Kommunalkredit Austria AG, had incrementally reduced its own staff and outsourced many of its middle and back office functions.  And of course, most of us were working from home with crying children, barking dogs, and intermittent wifi.  In short, it was a perfect storm of challenging legal, commercial, geographical, lingual and environmental issues.

How did you work through these challenges?

All parties were very professional and solution-oriented.  I cannot say that there were no white-knuckled moments or heated phone/email exchanges, but we managed to overcome every obstacle thrown in our path.  And there were certainly many of these obstacles.  As a group, both clients and advisers were jointly committed to the single objective of closing the transaction by the deadline, which we proudly did.  We now look forward to an open restaurant and the ability to meet in groups of more than two in order to properly celebrate!

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