Banco Sabadell has agreed to sell its remaining 20% stake in Promontoria Challenger I to Cerberus for €115 million, according to its half-yearly financial report. The transfer completes the bank’s exit from the company to which it had transferred a large part of its property exposure and results in a negative impact of €45 million on its results.
The stake had remained in the bank’s hands since the divestment agreed in 2018, when it transferred three portfolios of non-performing assets – named Challenger, Coliseum and Rex – to companies controlled by the US fund. The transaction enabled the bank to remove properties with a gross value of approximately €9,100 million from its balance sheet, while Cerberus acquired 80% of the vehicles and Sabadell retained the remaining stake.
The agreement now reached concerns Promontoria Challenger I, a company linked to the portfolio that was at the heart of much of the subsequent dispute between the two parties. The bank had classified its investment as a non-current asset held for sale; consequently, its transfer brings to a close a process that had been pending resolution for several financial years.
The dispute arose from deferred payments relating to certain properties that were not registered in the land registry when the divestment was finalised. Cerberus refused to pay part of the sums claimed, arguing that the agreed conditions had not been met, while Sabadell maintained that the fund was obliged to honour those obligations.
The dispute reached the High Court in London, which in December 2024 ruled in favour of the bank and ordered the US investor to pay nearly €358.5 million, plus some €47.4 million in interest and legal costs.
The agreement between the parties now replaces the ongoing proceedings with the sale of the remaining stake and allows Sabadell to sever its ties with the property vehicle once and for all, eight years after embarking on one of the key transactions through which it reduced the problematic assets accumulated in the wake of the financial crisis.
