Authors: Maria Kremida, Evangelos Manouvelos

Title: Loan Restructuring and Curing: EBA’s Guidelines on NPE Management and the case of the Greek Fish Farming sector.

Abstract

The paper reflects the issue of Non-Performing Loans and Exposures (NPEs and NPLs) in the Greek economy. We examine the macroeconomic and microeconomic factors that contributed to the creation of NPEs and NPLs, the types of regulations proposed and the legal and regulatory framework for the consolidation of the credit institutions' portfolios. In addition, we look into the EBA (European Banking Authority) Guidelines, the obligations of the credit institutions, the development of their NPE strategy, as well as the implementation of their operational plans. How can loan restructuring eventually cure an NPE?

The paper examines οne of the largest restructuring of Greek NPEs: the case of the Andromeda Group, operating in the Mediterranean aquaculture sector, which proceeded in June 2018 to the acquisition of Nireus Aquaculture S.A. and Selonda Aquaculture S.A.

The sale of Nireus (74.34%) and Selonda (79.62%) by the four Greek Systemic Institutions, to the investment scheme Amerra Capital Management - Mubadala Investment Company, which owns Andromeda Group, sets an example on management of Greek NPEs. Will the synergies, created between the three companies, be able to cure a 350 million euros NPE?

We analyze the role and contribution of bank lending in the acquisition process, the market environment of the industry, the intensity of competition, the strategic advantage it acquires, the arrangements applied and any write-offs made. We also look into the European Competition Commission’s requirements against sector concentration.