Desyfin intervention vs. Coopeservidores: How do the two processes differ?

Bernardo Alfaro, former head of the General Supervision of Financial Entities (Sugef) and former manager of the National Bank, commented nation The first difference between the two is who owns them.

At Coopeservidores, a savings and credit cooperative, 131,500 employees Its capital investment and resources are used to cover losses from bad loans.

By contrast, Desyfin, a company whose main owner is the Lacayo family, holds shares in Norwegian Investment Fund for Developing Countries (Norfund), a private equity firm owned by the Norwegian government, according to the company’s financial statements.

“The first big difference that affects the process is the nature of the capital. In a cooperative, the owners are the members, and there are many of them (…) Desyfin is a company with few common shareholders. In the case of Desyfin, the interaction with shareholders should be easier,” commented Alfaro regarding the possible injection of capital into the financial company.

As of June last year, the financial company’s share capital was £11.701 billion, but it has fallen to £1.339 billion Because most of the funds were used to generate credit estimates due to the deterioration of the conditions of the entity’s 21 debtors.

The former leader added that another contrast in analyzing the Desyfin intervention was the review of the credit business, since in this entity they were very much targeted at SMEs, while the cooperatives were very focused on consumer business.

“In Desyfin, there was talk of significant losses on assets because some businesses were not correctly positioned in their risk categories, and therefore the portfolio was revalued. This meant that managers tended to look at the portfolio in a kinder light and hoped that the debtors would recover,” commented the former director.

Similar paths

Alfaro added that the possible path for the current situation of Desyfin is the same as that of Coopeservidores, since the same legislation is used to determine the viability of the entity or a possible solution at the end of the intervention process.

“First, it must be determined whether the proposed restructuring plan will ultimately allow the entity to be handed over to shareholders so that they can continue to operate it. In Kupsayvidores, the reaction was negative,” stressed the former head.

Alfaro added that one of the actions to be evaluated will be the governance and reputation level. “It will have to be analyzed whether it is possible for these people (senior management and the board) to once again rebuild trust in the entity and manage to make it operational again, overcoming the allegations that have been made,” he said.

The former leader stressed that it would be up to Marianne Kött, who was appointed as the intervener, to decide whether it would be possible to recapitalize Desyfin or to recommend its solution, and what path it might take; that is, possible negotiations with another financial entity for high-quality assets and liabilities, or sending the case to bankruptcy.

Conassif gave Kött 30 calendar days from August 13 to provide advice on the future of Desyfin. The council’s agreement provides for an extension of the study period for another 30 days.