Banco de Valencia SA : IMF Request May Delay Auctions of Spanish Banks
06/11/2012| 07:16pm US/Eastern
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The planned auctions of Spanish banks seized by the government may suffer delays due to recommendations by the International Monetary Fund on how rescued financial entities should be sold, reports Cinco Dias in its Tuesday Internet edition.
The IMF says that the current EPA protection scheme, which addresses future losses generated by a failed entity being sold, will have to be revised. Currently, the Deposit Guarantee Fund, known as FGD in Spain and financed by the country's banks, will take on 80% of those losses, while the buyer will take the remaining 20%.
Although the scheme has been fundamental in encouraging the sale of rescued banks, the IMF believes that, at the least, the percentages should be adjusted to increase the margin of loss and motivate the buyer to run the loss-making assets in a more efficient manner.
Firm bids for nationalized Catalunya Caixa are expected to be submitted by June 27, while offers for Banco de Valencia (BVA.MC) are expected in mid-July.
-Write to Enza Tedesco at enza.tedesco@dowjones.com
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