Lloyds is reportedly in talks to sell £1 billion of toxic loans it inherited through its acquisition of HBOS in 2008.
According to the Sunday Times, the projected – codenamed Lundy, will see the bank attempt to sell off a number of businesses HBOS rescued at the height of the credit crunch. These include hotel chain Menzies, packaging company Linpac and housebuilder McCarthy & Stone.
The portfolio is said to comprise around 40 assets, with sources saying Lloyds could forced to take a 30% writedown.
According to the paper, the portfolio has attracted interest from private equity firm Electra and two American vulture funds, Centerbridge and Lone Star.