LKT advised Indotek Group

LKT advised Hungarian Real Estate Financing Zrt. (Indotek Group) on the first ever sale of a non-performing loan portfolio by the National Deposit Insurance Fund (NDIF). With this complex and pioneering transaction, Indotek Group acquired a portfolio of NDIF’s claims against 11 credit institutions in a public state tender.

Iván Sólyom, M&A, Antitrust and Competition partner, specialist in NPL transactions of LKT commented: “We are very proud to have advised Indotek, a significant market player, as the winning bidder in a very active NPL market in an unprecedented transaction of strategic importance for Hungary.”

Szabolcs Mestyán, Banking & Finance partner, the other specialist in NPL transactions of LKT, added: “This pioneering transaction was not only the first of its kind, but also the largest NPL transaction in Hungary to date. From a legal point of view this was not a standard NPL transaction as it involved the sale of claims by NDIF against credit institutions under liquidation stemming from the compensation paid by NDIF to customers of these credit institutions after their insolvency. The goal was to achieve that the buyer obtains the benefits awarded by law to NDIF in the liquidation proceedings (e.g. priority in the distribution waterfall compared to other creditors), thus it needed a special analysis of insolvency and banking laws and dedicated legal solutions not used previously on the market for the due diligence and the transaction documentation.”