Courtesy of Benzinga
Royal Bank of Scotland Group (NYSE: RBS) has agreed to sell a 25% stake in its 1.4 billion pound ($2.3 billion) UK commercial real estate loan portfolio to private equity firm Blackstone Group (NYSE: BX).
Blackstone will also take over the management of the assets, in an attempt to recover as much value as possible. They aim to close the deal in the next 90 days and anticipate about 12% to 15% return on the loans.
The sale is part of an effort by the bank to bolster its balance sheet by selling noncore assets. RBS is 83% owned by the British government after being bailed out during the credit crisis. RBS will retain its 75% stake for now but gradually sell it off, potentially to Blackstone.
The portfolio contains some of RBS’s most problem property loans, including nursing homes, pubs, auto showrooms and parking garages. The portfolio represents about half of the property RBS reported on its balance sheet at December 31, 2010.
Blackstone shares closed Friday up 4.9% for the day; RBS was up 3.3%.
