Christopher Gwilliam: getting the job done.
RIGA - In 2012, Reverta’s performance was in line with the approved restructuring plan and the company managed to achieve its main goal and repay the Latvian State Treasury 89.7 million euros, according to the company’s announcement at the NASDAQ OMX Riga stock exchange, reports Nozare.lv. Of this, 28.5 million euros was paid as interest on state aid, 61.2 million euros was used to repay the principal amount of state aid.
Overall, 100.5 million euros has been repaid to the State Treasury since Aug. 1, 2010. In addition, Reverta repaid the state guaranteed syndicated loan, originally a liability of failed Parex Bank, in the amount of 234 million euros in 2011.
“The results achieved clearly show the suitability of the chosen strategy and the ability of Reverta to achieve optimum results in complex and extreme situations. It should be noted that repossession and sales of real estate are taking up an increasingly important part of Reverta’s business, but the macroeconomic situation, residents’ purchasing capacity, deficiencies in certain laws and lengthy litigations are considerably influencing the performance of the company. Lengthy litigations make it impossible to sell pledged properties in a timely manner. As a result, quite often, the value of the repossessed properties decreases by 70 percent,” said Reverta management board chairman Christopher Gwilliam.
The limited possibilities of realizing distressed assets affect the amount of the company’s losses. Reverta ended 2012 with 137.7 million euros in losses, including 77 percent related to losses on the value of loans. These losses were envisaged by the restructuring plan for the duration of the company’s operations. It should be noted that the measure of Reverta’s activities is the amount of funds recovered – according to the specifics of the company’s activities, no revenue is to be expected, only the recovery of funds, as optimal as possible.
At the end of 2012, the repossessed real estate portfolio increased by more than 1,000 items. Despite many negative factors, Reverta recovered 107 million euros from its distressed assets portfolio by the end of the reporting period and more than 419 million euros since August 2010.
Reverta was created as a part of the bankrupt Parex Bank solution, assigned with the responsibility to work on the recovery of the so-called ‘bad assets’ held by Parex. The so-called ‘good assets’ went to the newly created Citadel Bank.