Austria nationalizes bank unit
Source: Agencies |
December 15, 2009, Tuesday
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Print Edition
Print Edition
AUSTRIA nationalized Hypo Alpe Adria, a unit of German public-sector bank BayernLB, yesterday, bank and government officials said.
BayernLB said Austria was taking its 67.08 percent stake in Hypo Alpe Adria for the symbolic price of 1 euro (US$1.46).
It added that it was maintaining its existing liquidity lines to the bank and waiving a total of 825 million euros in receivables due from Hypo Alpe Adria.
Bavarian Finance Minister Georg Fahrenschoen, who heads BayernLB's administrative board, said the deal was needed to "stabilize a bank of systemic importance to Austria and southeastern Europe." He said the German bank was writing 2.3 billion euros off its books as part of the deal.
In Vienna, Michael Kemmer, the head of BayernLB, called his bank's decision to give up its interest in Hypo Alpe Adria "a painful step."
Beyond the 825 million euros coming from the Bavarian bank's decision to give up its claims, Austrian Finance Minister Joseph Proell said Carinthia province, which was also part owner, was providing 200 million euros and up to 450 million euros would be offered from federal Austrian funds.
Carinthia and the third part owner, Austrian insurer Grazer Wechselseitige, also gave up their holdings for a symbolic 1 euro. Hypo Alpe Adria has some 7,000 employees and is active in central and eastern Europe.
BayernLB said Austria was taking its 67.08 percent stake in Hypo Alpe Adria for the symbolic price of 1 euro (US$1.46).
It added that it was maintaining its existing liquidity lines to the bank and waiving a total of 825 million euros in receivables due from Hypo Alpe Adria.
Bavarian Finance Minister Georg Fahrenschoen, who heads BayernLB's administrative board, said the deal was needed to "stabilize a bank of systemic importance to Austria and southeastern Europe." He said the German bank was writing 2.3 billion euros off its books as part of the deal.
In Vienna, Michael Kemmer, the head of BayernLB, called his bank's decision to give up its interest in Hypo Alpe Adria "a painful step."
Beyond the 825 million euros coming from the Bavarian bank's decision to give up its claims, Austrian Finance Minister Joseph Proell said Carinthia province, which was also part owner, was providing 200 million euros and up to 450 million euros would be offered from federal Austrian funds.
Carinthia and the third part owner, Austrian insurer Grazer Wechselseitige, also gave up their holdings for a symbolic 1 euro. Hypo Alpe Adria has some 7,000 employees and is active in central and eastern Europe.
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