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In Portugal the EOS Group has tested a new business. For the first time, it purchased a receivables portfolio in a country where it does not have a presence. The specialist Servdebt contributed important knowledge about the local market in a partnership with model character.
Paving the way:
Thanks to CEO Bruno Carneiro (left) and Senior Investment Analyst Rafael Paim of Servdebt, the test of a new business field with EOS was a success

The world owes its thanks to the Portuguese explorers for discovering many lucrative trade routes. In the 16th century, the Iberians were the first to sail to India and through the Strait of Magellan. The new routes opened up valuable territory for merchants. For the EOS Group too, a Portuguese partner is now the forerunner. ‘For the first time, at the end of 2015 we bought a receivables portfolio in a country in which EOS is not represented by an affiliate. That was the test run for the introduction of a new business field,’ explains Stefan Cohrs, Head of the EOS Group’s Cross-border Center in Hamburg, Germany.

EOS had the chance to acquire a portfolio from the Portuguese branch of a Spanish bank. ‘That rather small package with a face value of ten million euros was ideal for our entry into the market,’ says Mr Cohrs. Right from the start the Portuguese partner Servdebt was there to add local know-how to the EOS Group’s expertise in debt purchasing. ‘Servdebt supported us through the entire process from pricing to contract signing and assumed responsibility for debt recovery.’

Useful historical data

EOS and Servdebt have worked together since 2012 in international debt collection. Initially, the Portuguese took over only cross-border fiduciary cases affecting customers residing in Portugal. With the debt purchase, EOS now benefits from a further core competence of its partner. ‘We are market leader in the acquisition and processing of defaulting loans in Portugal. Currently, we manage approximately 3.5 billion euros,’ says Bruno Carneiro, Chief Executive Officer (CEO) of Servdebt, who founded the company in 2007.

Servdebt has extensive knowledge of its home market, which is very useful, for example, for price calculations that precede the purchase of a portfolio. ‘Given its experience with debt purchase, the company can draw on extensive historical data on Portuguese customers,’ says Mr Cohrs. This facilitates the assessment of future recovery success. Communication between experts at Servdebt and EOS further contributes to success. ‘Our analysts have consulted closely with the central Risk Management of EOS in Germany,’ reported Mr Carneiro. Together, the partners set a price with which Servdebt entered the race and won the contract. ‘The amount of the bid was certainly crucial. On top of that, Servdebt has an excellent reputation in Portugal and worked in the past with the seller,’ says Mr Cohrs.

Exploring new markets:
Stefan Cohrs from the EOS Cross-border Center
Transparent:
Servdebt has a solid reputation in Portugal

During the pilot project, the companies have grown closer. As a sign of intense cooperation, EOS has accepted Servdebt in the alliance of EOS Preferred Partners. ‘We award this quality seal to selected partner companies after an extensive audit. They perform other services for EOS in addition to the international debt collection. For example, they are available to clients as a point of contact, if they have a branch in Portugal,’ explains Mr Cohrs.

A very promising model

Sellers of debts benefit from the proven competence and reliability of the EOS Preferred Partners, as shown by the purchase in Portugal. There, Servdebt has started the process of recovering the acquired portfolio, which is comprised primarily of consumer and vehicle loans. ‘Our goal is to provide assistance to all our clients in settling their outstanding debts. It is very important to us to preserve not only the reputation of sellers and buyers, but also our own reputation,’ says Mr Carneiro.

KNOWING
WHAT
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Whoever stays on the coast cannot discover any new oceans.
FERDINAND MAGELLAN (FERNÃO DE MAGALHÃES) (1480–1521), the Portuguese sailor discovered the Strait of Magellan in 1520. The route between the South American mainland and the island Tierra del Fuego spared ships the dangerous voyage around Cape Horn. The Strait of Magellan remained one of the major international trade routes until the opening of the Panama Canal in 1914.

It is still much too early for a final evaluation, as the business plan is set to last for seven years. Nevertheless, Mr Cohrs is optimistic: ‘Servdebt set a price for the portfolio that is extremely attractive for the seller and for us here at EOS. Therefore, we are very confident that the purchase will prove to be a great success for all the parties concerned.’

The German-Portuguese maiden voyage might well be an excellent model for the EOS Cross-border specialist too: ‘We are currently in the process of exploring several places where we could open up other new markets for debt purchase, with the support of the EOS Preferred Partners,’ Mr Cohrs explains. The early Portuguese navigators were not satisfied with the discovery of a single route either.

Paving the way:
Thanks to CEO Bruno Carneiro (left) and Senior Investment Analyst Rafael Paim of Servdebt, the test of a new business field with EOS was a success
Exploring new markets:
Stefan Cohrs from the EOS Cross-border Center
Transparent:
Servdebt has a solid reputation in Portugal
Photo at the top: Preferred partners: Joana Viegas, Junior Legal Counsel, and Bruno Carneiro work together with the experts from EOS.