By Valentina Za

MILAN (Reuters – UniCredit has received five offers that are not binding for certain parts of its leasing activities, according to two sources close to the matter. CEO Andrea Orcel focuses his attention on companies with low capital requirements.

Orcel, in a revised strategy announced Dec. 9 that he would generate sufficient capital to provide 16 billion euros ($18.4 billion) of dividends to shareholders and buy back shares through 2024.

Former UBS banker, he said UniCredit would place bets on businesses that help maximize return on capital (ROAC).

This isn’t the case with the leasing industry. Reuters reported that Italy’s 2nd-largest bank in terms of assets, was looking into a sale.

UniCredit was invited to meet with around 50 potential investors, to whom 16 replied, and just before Christmas UniCredit received about five non-binding proposals, according to one source.

The bidders are private equity firms Bain and Christofferson Robb & Co (CRC) and two foreign leasing industry players, the two sources said.

One source said that Italy’s Alba Leasing is interested in the deal. It was previously owned by rival banks like Banco BPM or BPER.

UniCredit, Bain and Bain did not respond to our request for comment. CRC and Alba Leasing couldn’t be reached.

UniCredit Leasing holds around 10 billion euro in credit, with around 500 million euros worth of unperforming debt.

The portfolio consists of more than two-thirds real estate lease contracts and the remainder relating to equipment.

According to one source, the major interest in equipment is the most important for industry players.

According to sources, none of these bids were for the entirety of the business. UniCredit might decide to only divest certain parts, depending on its willingness to take the losses.

UniCredit, which uses the IFRS5 accounting principle to calculate its 700 million-euro hit from non-core assets sales in December 2005, calculated a 770m euro impact on the plan’s length.

The second source stated that private equity investors are considering the loan portfolio. UniCredit’s current rate of return, just above 1%, means it will have to make a substantial loss in order to sell it.

According to October sources, UniCredit may decide not to buy the business, as it is working closely with PwC.

UniCredit Leasing is not present in the car leasing market, but this attractive niche saw Societe Generale’s ALD car leasing division buy Dutch competitor LeasePlan. The purchase cost 5 billion Euros.

($1 = 0.8841 euros)