Hamburg-based corporation EOS Group and IFC, a member of the World Bank Group, have agreed to help restore lending to businesses and consumers in Central and Eastern Europe (CEE). They have earmarked $100mln to co-finance the acquisition of distressed debts, with plans to resolve debts totaling $2bln in the next three years. Activities initially will focus on Russia where nonperforming loans are valued at about $50bln, where the operation will be overseen by the EOS subsidiary.
Commenting on the initiative, Justus Hecking-Veltman, a member of the EOS Group’s board of directors and CFO, noted that the co-investment will allow the group to grow its business on markets, which have been hard hit by the financial crisis, while sharing risks and upside with a strong partner in region. From her side, Snezana Stoiljkovic, IFC director for CEE, noted that dealing with distressed assets is a key component of the IFC’s crisis response. “Tackling nonperforming loans will help ensure that banks continue to provide access to finance for businesses and individuals, which is essential for economic recovery.”
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