Silicon Valley Bank’s parent company, SVB Financial Group, is exploring for methods to liquidate its assets and is considering filing for bankruptcy as one of its options.
SVB Financial is reportedly looking for purchasers for its remaining assets and considering bankruptcy, according to a Reuters article that quoted unnamed sources; however, sources stated that the company is attempting to avoid going through such a process.
A restructuring team was appointed by SVB Financial’s board of directors on March 13 to investigate “strategic alternatives” for the business, two of its subsidiaries, the venture capital firm SVB capital and the investment bank SVB Securities, as well as other holdings 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.”
Silicon Valley Bank was shut down by California regulators on March 10 following a bank run, with the U.S. federal deposit insurance corporation (FDIC) taking control of the bank’s assets. SVB Capital and SVB Securities are unaffiliated with Silicon Valley Bank.
After an initial auction on March 12 that failed to generate any interest from big U.S. banks, the FDIC is currently trying again to sell SVB. For the upcoming auction, the regulator reportedly used the assistance of American investment bank Piper Sandler Companies.
According to the report, interested banks have until March 17 to submit their offers. However, according to reports, the FDIC, which is seeking to sell both SVB and Signature bank “in their totality,” has declared that only prospective bidders with an existing bank charter are permitted to study both banks’ financial data before submitting their offers.
If the banks are not sold as a whole, the agency may also accept bids to buy certain portions of the institutions. Also, according to unnamed sources, the buyer of Signature must be ready to end all cryptocurrency-related operations at the bank.