March 28 (Bloomberg) -- Hypo Real Estate Holding AG, the bailed out German commercial real-estate lender, said it posted a wider-than-expected loss of 5.46 billion euros ($7.3 billion) last year and that the government will take an 8.7 percent stake as a first step toward nationalization.

Hypo Real Estate had a pretax loss of 5.38 billion euros compared with a pretax profit of 862 million euros in 2007, it said in a statement today. Four analysts in a Bloomberg survey had expected a net loss of 4.5 billion euros.

Germany’s bank rescue fund, Soffin, will acquire 20 million shares valued at 60 million euros, the company said in a separate statement. The new stock must be issued at a “minimum prescribed” price of 3 euros a share.

Hypo Real Estate, which lost 93 percent of its market value over the last 12 months, has already been bailed out by the government and financial institutions with credit lines and debt guarantees totalling 102 billion euros. The lender, which almost went bankrupt after its Dublin-based Depfa Bank Plc unit failed to get short-term funding in September, said today it expects to remain in a “loss situation” for at least two years.

“It is a prerequisite for the intended recapitalization of Hypo Real Estate Group by Soffin that either Soffin or the German government gain full control over Hypo Real Estate Holding,” the Hypo Real statement said. “To this end, it is intended to make use of the options that will be provided by the German Financial Markets Stabilization Amendment Act, which is currently being discussed in the legislative process.”

Nationalization Law

Hypo Real fell 1.7 percent to 1.14 euros a share yesterday in German trading, valuing the company at 240.6 million euros.

J. Christopher Flowers and Richard S. Mully, who lead a group of investors that together owns 23.7 percent in Hypo Real Estate, said on yesterday they were leaving the lender’s supervisory board because of “possible measures to be taken by the German government against Hypo Real Estate shareholders.”

Germany’s upper house, the Bundesrat, will be asked to approve the Hypo Real Estate seizure legislation when it comes before them on April 3, following its passage by the lower house on March 20. The law also imposes a time limit, stipulating that any seizure has to be initiated by the end of June.

The lender’s nationalization would be the first of a German bank since the 1930s.

Hypo Real Estate said its 2008 reflected “the difficult situation on the capital and financing markets.” The lender was also hurt by a 2.5 billion-euro goodwill writedown for Depfa, which it acquired for about 5.3 billion euros in July 2007.

At the end of 2008, the company had assets valued at 419.7 billion euros, compared with from 400.2 billion euros a year earlier.

To contact the reporters on this story: Oliver Suess in Munich at osuess@bloomberg.net; Simone Meier in Frankfurt at smeier@bloomberg.net

Last Updated: March 28, 2009 16:46 EDT