Auerbach Schifffahrt is in pole position to take over 43 multipurpose (MPP) ships being sold by Nord/LB. The Hamburg-based MPP operator has entered into exclusive talks with the bank, with a view to taking over a fleet of ships of 5,000 dwt up to 20,000 dwt, said German sources.

Lucius Bunk-led Auerbach is understood to have teamed up with US financial partners charged with raising capital to acquire the fleet, which has an estimated value of around €200m ($235m).

The deal is one of three large shipping transactions that, if concluded, should help Germany's Nord/LB reduce its shipping portfolio and its non-performing loan (NPL) exposure.

On Wednesday, the bank said it was making strong progress in reducing the problematic part of its €7.3bn NPL exposure.

Sizeable disposals

It is seeking to dispose of a large chunk via a sale to potential buyers, including buyout group Cerberus, private equity firm Lone Star and hedge fund Davidson Kempner.

Sources said that Nord/LB is marketing two shipping loan portfolios — denominated Big Ben and Tower Bridge — worth €2.5bn ($3bn) and €4bn ($4.5bn), respectively.

Nord/LB declined to comment on reports, but said it expects to reduce NPL shipping loans to under €5bn “much earlier” than the end of 2019, as was originally planned.

The move comes amid a number of changes in the shipping division of the bank, which includes the departure of the person responsible for selling its ships' fleet.

Aaron Sen, who headed the ship sales desk established by the German bank in 2017, is leaving Nord/LB in the next few months to take up another position in shipping, TradeWinds confirms.

But despite scaling down its NPL shipping portfolio, the German bank continues to develop new business.

Market picks up as Nord/LB moves to offload MPP fleet

Speaking at the Hansa Forum in Hamburg last week, Nord/LB’s head of global shipping Tobias Zehnter said the bank had done a lot of new business this year compared to last year.

“We have been able to convince our shareholders to do more maritime newbuildings,” he said. “Compared to other asset classes, the returns are a high level.”

Auerbach's Bunk, who is managing director, was unable to comment.

Observers believe that any acquisition of 43 vessels would be transformational for Auerbach.

Founded in 2010 by Bunk and former partner Alexander Tebbe, it remains a relatively youthful, midsize MPP operator and its growth has been modest in recent years.

Today, Auerbach runs a fleet of 13 midsize MPP ships, after taking five Thorco-owned MPP units on technical management over the summer.

A successful completion would quadruple its fleet and result in significant consolidation in the MPP market.