Prelios Group CEO Riccardo Serrini, at Class CNBC channel

Prelios Group CEO Riccardo Serrini, interviewed by Jole Saggese for the Report program on the Class CNBC channel on April 22, analyzes the impact of the Covid-19 emergency on distressed loans, specifically UTPs and NPLs.

“DL Liquidity is an enormous problem because companies in temporary difficulties are classified as UTPs and excluded from State aid, and this has a very significant economic and social impact,” observed Serrini during the Skype live stream broadcast. “Large numbers of companies, about 40,000, are classed as UTPs, and often they are profitable with positive Ebitda. And they employ about a million people directly and in allied industries.”

As far as ways to try and mitigate the problem are concerned, the Prelios CEO hopes that help might come from Italian institutional investors with long-term investment horizons: “Insurance companies and pension funds with lower yield expectations than opportunity funds would be welcome in alternative asset management, where their exposure is still low.” For NPLs, where management often involves insolvency procedures, the fact that as a result of the lockdown the courts have suspended activities and are not due to re-open until May 11 adds to the difficulties. This situation, Serrini said, “increases the already high backlog of work, which it won't be possible to make up given that the courts close in August. Hopefully at least the more than 10 billion euro worth of cash blocked in procedures, receiverships, compulsory windings-up, etc., will finally be distributed and put back into the real economy.”

Moving on to the second phase on which the Government is currently working and whose conditions are due to be announced shortly, the Prelios Group CEO said: “Prelios is preparing to offer new property management services in line with the new concept in use of office space that will necessarily spread with the end of the emergency phase. Smart working will becoming increasingly routine. Management of people coming into the workplace and forms of aggregation will have a vital role. From this point of view, our Group is already developing new concepts, including prevention systems to offer our clients, such as systems that measure body temperature and devices to check social distancing. In fact, our new services will lever innovation and tracking.”