Hypo Real Estate Holding AG, the German lender bailed out during the financial crisis has confirmed that it will begin the sale of its Dublin-based Depfa Bank unit.
The lender opened a public tender offer for Depfa and called for bids by 12pm local time, September 12th, Munich-based Hypo Real Estate said in a statement yesterday. No transaction is anticipated before early 2014, the company said. Hypo Real Estate received European Union approval in 2011 for a bailout as Germany injected €10 billion of capital to save it from collapse after Depfa couldn’t raise financing following the bankruptcy of Lehman Brothers Holdings Inc. in 2008.
“In the course of the last year, operations have been stabilized and portfolio risks were significantly reduced,” Hypo Real Estate said in the statement.
As part of the restructuring agreement with the EU, Hypo Real Estate chief executive officer Manuela Better has to sell the Depfa unit, which is closed to new business, by the end of 2014.
As of June 30th, Depfa held a core public sector finance portfolio of €40 billion, with secured instruments accounting for about 80 per cent of the funding. Better also needs to find a buyer for pbb Deutsche Pfandbriefbank, which combines most of the continued business of Hypo Real Estate by the end of 2015.
The state and financial institutions also provided Hypo Real Estate with credit lines and debt guarantees of as much as €142 billion.
Hypo Real Estate, which is fully owned by the German government since its bailout, transferred about €176 billion of assets in 2010 to the FMS Wertmanagement, the bad bank that’s winding down the portfolio. – (Bloomberg)
