By Giovanni Legorano
ROME--Italian bank UniCredit SpA said Monday it has signed a definitive agreement with Pacific Investment Management Co., or Pimco, and Fortress Investment Group for the sale of 17.7 billion euros worth of bad loans.
The transaction is part of strategic plan the bank unveiled last year, which included cutting thousands of jobs and selling EUR13 billion in fresh shares. Earlier this year, the bank completed the capital increase.
The deal with Pimco and Fortess allows the bank to shed the large portfolio of bad loans by bundling them into securities to be sold to investors.
To that end, the bank has agreed to transfer one portfolio of bad loans to a newly created firm controlled by hedge fund Fortress Investment Group and another to a firm controlled by Pimco.
UniCredit will own a minority stake in the two companies. On Monday, it said that during the second half of the year it will consider the sale of part of its stakes to reduce it to below 20%.
Write to Giovanni Legorana at Giovanni.Legorano@wsj.com
(END) Dow Jones Newswires
July 17, 2017 03:29 ET (07:29 GMT)
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