UPDATE 1-BTG Pactual in talks to exit debt collector Recovery, sources say

miércoles 2 de diciembre de 2015 12:27 GYT
 

(Adds details on talks, background on Recovery from paragraph 3)

By Guillermo Parra-Bernal and Tatiana Bautzer

SAO PAULO Dec 2 (Reuters) - Grupo BTG Pactual SA is in talks to sell stake in Recovery do Brasil SA, Latin America's largest debt collector, three people directly involved in the talks said on Wednesday, as local and global investors look to enter the burgeoning sector.

Lone Star Funds is among the firms specializing in distressed debt investments that have held talks to enter Recovery, said the sources, who requested anonymity because negotiations are under way.

The move follows the arrest of BTG Pactual founder André Esteves in a corruption probe. Latin America's No. 1 independent investment bank is rushing to sell assets and pools of loans to rivals to shore up cash holding and restore investor confidence.

São Paulo-based BTG Pactual could fetch between 400 million reais and 1.2 billion reais ($103 million to $312 million) from the sale, depending on whether it includes the bank's platform that Recovery uses to price loans, two of the sources said.

The first source said talks on the sale of BTG Pactual's approximately 50 percent stake in Recovery were advancing fast. BTG Pactual controls Recovery, with the remaining stake in the company held by the World Bank's International Finance Corp and the company's founders from Argentina.

An unidentified São Paulo-based distressed debt company, which is teaming up with undisclosed partners to explore the purchase of Recovery's bad debt portfolio or collection platform, has also entered talks and is considering bidding, said the second source.

The third source said interested parties were already preparing due diligence proceedings on Recovery's portfolio and platform, without elaborating. Recovery oversees about 50 billion reais in distressed debt loans and is a large buyer of bad credit from Brazil's biggest financial institutions.   Continuación...