Deals

Pillarstone and banks provide €25m to support Greek NPL deal

The deal is the first of its kind in Greece, according to Pillarstone, after the government reformed laws to better protect international investors.

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Pillarstone, the non-performing loan (NPL) platform backed by KKR, has made its first investment in Greece since the introduction of new laws to support the restructuring and turnaround of Notos Com Holdings.

An agreement reached with Notos and its lenders will see Pillarstone invest capital in the business and provide management expertise to stabilise the business and support its future growth.

Pillarstone said it has arranged an innovative structure for the company, taking advantage of regulatory changes that have created a more favourable environment for international investors.

The structure will see NPL positions of Alpha Bank, Eurobank-Ergasias, National Bank of Greece and Piraeus Bank serviced by the Pillarstone platform. The banks and Pillarstone will invest €25 million in new funds. The firm’s majority owner, Michalis Papaellinas, will also invest in the structure and provide commercial assistance to support a long-term business plan.

Pillarstone expects the deal to complete within the next couple of months subject to regulatory and other approvals by Greek authorities.

John Davison, CEO of Pillarstone, said: “The business will be provided with  capital, operational expertise and support for Notos’ experienced and loyal management team. This has been our main focus throughout the period since I first met Michalis well over a year ago, and in which time we have worked closely together with him and his team to develop the new Business Plan for Notos.”

Notos operates a number of department stores under the Notos Galleries and Notos Home brands in Greece. It was established in 2001 through a combination of several companies.

Pillarstone said the Greek government’s steps to make legal reforms will provide better certainty and security for international investors to help Greek banks address the NPLs on their balance sheets.

Earlier this month, Pillarstone announced its first successful exit with the sale of Italian business Cuki to a German food packaging company, making a full recovery of its capital.