RIGA, June 22 (Xinhua) -- Reverta, the state-owned company handling the distressed assets taken over from Latvia's Parex Bank which the government bailed out during the 2008 financial crisis, is selling its loan portfolio to Swedish-controlled firm Gelvora.
Reverta said in a statement to Nasdaq Riga stock exchange on Thursday that it would gradually turn over 4,500 credit files to Gelvora as part of the deal, with the process expected to take approximately three months to complete.
The value of the transaction has not been disclosed under the terms of the deal.
Gelvora is a multinational company which belongs to Swedish financial holding Marginalen AB.
Reverta's supervisory and management boards said they based their choice of investor on criteria such as the candidates' compliance with industry standards and ability to organize a transparent sales process, as well as potential legal risks that might arise from the transaction.
Reverta, which was established seven years ago to deal with the so-called toxic assets of Parex Bank whose healthy part of the business was handed over to Latvia's Citadele Bank, has so far managed to recover 754 million euros (841 million U.S. dollars), or 67 percent of Parex Bank's distressed assets.
At present, Reverta's portfolio only contains the most problematic assets with chronic solvency and liquidity issues. These loans have been overdue for more than 2,500 days on average.
At the beginning of this year, Reverta had yet to recover over 400 million euros worth of Parex Bank's distressed assets.
The Latvian government started to look for a buyer of Reverta's loan portfolio last year as under Parex Bank's restructuring plan, which has been approved by the European Commission. Reverta has to sell its portfolio and fold operations by the end of this year.
