A grand début

With careful planning, EOS Credirec in France purchased its first receivables secured by real estate. More are expected.

‘You’ve got mail’ announced the arrival of an eagerly awaited message addressed to Véronique Klein, Head of the B2B Receivables Department at EOS Credirec, in February 2015. At that time, she and her team had just completed six months of hard work on analyses and negotiations. ‘We had made our first bid ever on the purchase of a B2B portfolio,’ says Ms Klein. The email confirmed their bid was successful. After ten years of B2C acquisitions, EOS Credirec had entered a new market segment. ‘Business client receivables are more complex and challenging, as there can be several individuals or legal entities that are liable for a certain debt,’ says Ms Klein. That’s why EOS had evaluated individually each case worth more than 20,000 euros.

A business plan for every receivable

The portfolio has a value of over 40 million euros with more than 2,000 bank debts. Some have recently become overdue, others have been titled and a few cases are secured by real estate. Employees from Ms Klein’s department worked with legal experts, lawyers and estate agents to define a collection strategy for each case. They assessed the receivables, guarantees and prospects for debt recovery. ‘Finally, our investment committee checked the analyses again. We have a ten-year business plan for each receivable. In collaboration with EOS Credirec Risk Department, we calculated a global portfolio price. We then consulted staff from EOS central Risk Management in Hamburg, Germany, who validated the value assessment for the whole portfolio,’ says Ms Klein.

This approach has proved its worth: ‘The recovery of the first B2B receivables portfolio went better than we expected,’ says Ms Klein. Our first venture into the B2B market was a success and further purchases will follow. EOS Credirec will develop its own real estate and legal expertise. ‘We will take on more of the work involved in evaluating B2B receivables portfolios in future. We aim to be a market leader in purchasing B2B receivables just as we are in B2C,’ she says.