The German federal states of Hamburg and Schleswig-Holstein have signed a sale agreement for its ailing HSH Nordbank, formerly one of the top global providers of loans for the shipping industry.
The agreement was sealed between HSH Beteiligungs Management, owned by the aforementioned federal states, and a consortium composed of Cerberus European Investments, JC Flowers & Co., GoldenTree Asset Management UK, Centaurus Capital LP and BAWAG.
The purchase price for 94.9 percent of HSH shares amounts to EUR 1 billion (USD 1.22 billion), as informed.
With today’s signing of the purchase agreement, we have achieved something that many would have considered impossible a year ago, Prime Minister of Schleswig-Holstein Daniel Günther, said.
After a careful selection process, the states have found suitable buyers for HSH Nordbank and have achieved a good negotiating result, Olaf Scholz, the mayor of Hamburg, said.
HSH Beteiligungs Management started the bidding process to sell the majority of the shares in HSH Nordbank in January last year.
The bank started to encounter financial problems in 2008 as the financial crisis disrupted a number of maritime loans, worth billions of euros.
The loan provider has been working ever since on reducing non-performing legacy exposures dating back to the years before 2009.
To that end, the German bank concluded new business deals in its shipping segment on a restrictive basis.
This means that the bank inked deals on financing exclusively with international shipping companies that have a good credit rating.
In the group’s shipping portfolio, the non-performing exposure was reduced to EUR 5.8 billion from EUR 8.3 billion in 2016.
The closure of the bank’s privatization was announced in the nick of time to meet the deadline set by the European Commission, which is the end of February.
World Maritime News Staff