DDM - DDM Group

[NewbieD]

Doubling their balance sheet aquiring 28 MEUR in Croatia and 50 MEUR in Greece in secured and unsecured NPLs. The greece purchase in supposedly one of the bigger NPLs transactions in Greece so far. The notional value of the Greece portfolio is 1.3 BEUR.

As a newbie in this sector, what factors are important in judging how cheap this might be and what the cash-flow over time might look like? Reading suggestions welcome.

As there are some investors in greece banks here: what's your view on the availability of NPLs going forward from Greece?
Any insight on if the greek seeming mentality of not caring about the tax collector transfer to not caring about clean credit? A bit scared that they've overpaid based on their profitability experience from slightly different cultures.

[NewbieD]

Realised there is one development I've totally missed here - swiss franc mortgage holders in eastern europe.
Apparently this was sold agressively from about 2000 to 2006 in many countries where DDM is involved - Slovenia, Croatia, Romania, Poland. Many of these are now heavily underwater due to the local FX weakening against the franc. For instance in Poland the zloty has gone from about 2 in 2008 to 4 needed to get one franc.

I have no idea how big of a share of DDMs portfolio this is - only that its not zero since they were involved in a dispute in Slovenia.

There are processes in at least Slovenia, Poland, Romania aiming to nullify these loan contracts - or force conversion into local fx using fx rates at the time of signing. The basis is the banks didnt inform about the risks but rather sold them as being superior due to being tied to a strong currency (hah).

Question is - should I be worried about legal risks as an NPL investor? How big share of the secured portfolios is this likely to be and to what extent has it already been priced into purchases in the last two years? Thankful for any insights.

Apart from this one risk I think the investment looks good. Economy turning around in many invested countries with project GDP growth rates 2018 from 2% (Greece) to 3-4% (Slovenia, Czech, Croatia) and 6% (Romania). Lots of portfolios seem to be coming up for sale.

[NewbieD]

Been selling this for the last month, decreased from 20% at most to 6% now.

- information vacuum what's going on. I knew this was likely on the financial front, i.e. you don't really know for a long time how much will be collected eventually, but coupled with below I'm just not confident any more.
- previous CEO Gustav Hultgren who I liked quit after going from CEO to 'Head of Greece' (last big transaction) for < 2 months. And promptly sold all his shares.
- new CEO which is one of the main owners quit due to family reasons. Founder Kent Hansson is back as interim CEO.
- they did not meet their revised investment goal for 2017. Could mean the price of portfolios is going up, which would be a postiive. Could also mean they are too busy handling what they already bought and the personnel changes above.
- other debt collectors e.g. IJ and Hoist have disappointed results wise.