EU to give HSH owners more time for sale -sources
FRANKFURT
Tue Jun 15, 2010 10:19am EDT
FRANKFURT June 15 (Reuters) - The European Commission will give the owners of bailed-out German landesbank HSH Nordbank [HSH.UL] until 2014 to sell the state-backed lender, two financial sources in
Germany told Reuters on Tuesday.
Financials
"An agreement has in principle been reached", one of the sources said, adding there were still talks about minor details.
"There are growing signs that HSH's owners will be given until 2014 to sell their stakes," he said.
HSH is majority-owned by the city state of Hamburg and the state of Schleswig Holstein.
"My last information is that it will boil down to 2014," the second person said, adding preparations for the sale -- which might include asking for state loan guarantees to ease the bank's refinancing needs after a change of ownership -- is set to start as early as this autumn.
The European Union had pushed for fast action, while HSH's owners asked for time until at least 2014 to allow markets -- and bank asset prices -- to recover.
HSH and its owners declined to comment. The EU declined to comment.
The European Commission, tasked with ensuring state aid does not skew competition in the 27-member EU, is seeking a change of ownership at several of
Germany's landesbanks, which are typically owned by local savings banks and state governments.
Landesbanks provide wholesale banking services to the public savings banks in their area, and financial observers say the country needs only two or three of them instead of the seven there are now.
Talks between the EU and HSH's owners intensified significantly in recent days, a third source said, adding "the goal remains to strike a deal before Brussels' summer break".
Most EU civil servants take a traditional holiday break in August.
HSH also has to reduce its balance sheets drastically.
Under the restructuring plan to be approved by the EU, HSH will sell most of its foreign and capital-market related operations alongside shareholdings in companies like fund manager Deka, real estate funds manager HSH Real Estate or its stake Deutsche Anlagen-Leasing activities.
"Altogether, it adds up to a few dozen shareholdings being put on the auction block," one of the sources said, adding "unresolved issues relate to the timing of individual asset asset sales rather than the sales themselves.
HSH, like other landesbanks, lost billions of euros on risky investments in the financial crisis, forcing its owners to prop up the lender with 10 billion euros in loan guarantees and a capital injection of 3 billion euros.
Until now, however, investors for landesbank assets remain out of sight.
Even landesbanks like Helaba [HLAG.UL] and NordLB [NDLG.UL], which came through the financial crisis well, have ruled themselves out as possible fixers for their sector. [ID:nLDE63S2CT] [ID:nLDE63E0Z4]
Rival WestLB has to find a new owner by 2011. However, the EU might allow WestLB some extra time if the owners remain unable to find a buyer willing to pay a fair price, sources previously told Reuters. [ID:nLDE64J1BD]
"It is possible that HSH might be allowed a similar transition period," one of the sources said.
(Reporting by Arno Schuetze; additional reporting by Angelika Gruber in Frankfurt and Ilona Wissenbach in Brussels)
EU to give HSH owners more time for sale -sources | Reuters
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