Lazard Ltd. will advise Carinthia’s state asset agency as it faces having to meet as much as 13.6 billion euros ($15 billion) in debt guarantees it provided for failed Austrian lender Heta.
Kaerntner Landesholding, which had guaranteed the failed lender’s debt, on Friday received court permission to start a reorganization, a procedure that gives companies time to reorganize and avoid insolvency, filings from its lawyers show.
Austria was forced to nationalize former Carinthian state bank Hypo Alpe-Adria-Bank International AG in 2009 and created a bad bank, Heta Asset Resolution AG, to house its most toxic loans. The government halted further support in March, and regulators imposed a debt moratorium. Heta this week said it had a 7 billion-euro capital shortfall and will have to share losses with creditors or face insolvency.
“The reorganization plan will have to determine, together with the individuals concerned, whether, and in which amount, an appropriate compensation for the potential guarantee claims can be made,” KLH said in its filing.
KLH asked Heta creditors to register their claims to determine its potential liabilities and which part of them it will be able to repay.
KLH manages Carinthia’s assets, in particular the proceeds of the sale of its Hypo Alpe stake to Bayerische Landesbank in 2007, as well as Klagenfurt Airport and other local companies. It had total assets of 557 million euros at the end of last year, according to the court filing.