THE ORDERLY break-up of Dexia began to take shape yesterday as the ailing Franco-Belgian bank announced it was in advanced talks to sell its Luxembourg unit.
The lender’s shares were suspended in the afternoon, having fallen a further 17 per cent, to €0.85.
Dexia said Belgian regulators asked for the suspension, which will last until Monday, after extreme trading volatility in recent days and uncertainty over the steps to be taken.
The board of Dexia will meet tomorrow in Paris to approve a plan gradually to dismember the 15-year-old bank, which ran into difficulties after short-term interbank markets it relies on for funding dried up because of the euro zone debt crisis.
Belgium’s cabinet edged towards nationalising Dexia’s Belgian arm, ruling out an alternative plan put forward by regional authorities – both shareholders of Dexia and users of its lending facilities – to spin it off into an independent entity controlled by shareholders.
However, people familiar with the ongoing talks said Dexia was unlikely to rush into a fire sale of its assets, which include retail banking networks in Belgium and Turkey, a local government lending specialist based in France, RBC Dexia Investor Services and a well-regarded asset-management arm.
Belgium and France earlier this week said they would guarantee bonds issued by Dexia to finance itself, allowing it to finance itself during the restructuring of the group.
Dexia declined to comment on the identity of the Luxembourg buyer.
France is arranging a takeover of the French municipal loans business by La Banque Postale and the Caisse des Dépôts et Consignations, the French sovereign wealth fund that owns stakes in Postale and Dexia. – (Copyright 2011 The Financial Times Limited)
