SVB Financial Group, the parent company of troubled U.S. lender Silicon Valley Bank (SVB), is looking for ways to sell off its assets and is considering entering bankruptcy protection as one of its options.
Bankruptcy filing as an option for selling assets
According to a Reuters report which cited anonymous sources, SVB Financial is scouting for buyers for its remaining assets and is exploring bankruptcy, although sources said that the company is trying not to go through such a process.
On March 13, SVB Financial announced that its board of directors hired a restructuring team on March 13, to explore “strategic alternatives” for the company along with two of its subsidiaries, venture capital platform SVB capital, and investment bank SVB Securities, plus other investments and assets.
The announcement also said the committee, which comprises five independent directors, will also “explore all alternatives for addressing the approximately $3 billion of funded debt held by the holding company, which is recourse only to SVB Financial Group and is not guaranteed by the subsidiaries.”
SVB Capital and SVB Securities are not connected to Silicon Valley Bank, which was shut down by California regulators on March 10, after the lender experienced a bank run, with the U.S. Federal Deposit Insurance Corporation (FDIC) taking control of the bank’s assets.
FDIC sets new date for SVB and Signature Bank bids
The FDIC is currently making another attempt to sell SVB after a failed first auction on March 12 which saw no bids from major U.S. banks. According to CNBC, the regulator employed the services of American investment bank Piper Sandler Companies for the new auction.
The report, which cited anonymous sources, said that interested banks have until March 17 to submit their bids.
Furthermore, sources said that the FDIC, which is looking to sell both SVB and Signature bank “in their entirety”, stated that only potential buyers with an existing bank charter can view both banks’ financial records before submitting their bids.
The agency may also accept bids to purchase parts of the banks if the institutions are not sold as a whole. In addition, Signature’s buyer must be prepared to discontinue all cryptocurrency-related business at the bank, as stated by anonymous sources.