EU Orders HSH Nordbank to Be Sold in 8 Billion-Euro Overhaul
- Hamburg shipping lender to transfer faulty loans to bad bank
- State owners get nod for 10 billion-euro guarantee as fees cut
HSH Nordbank AG’s state owners were ordered to sell the Hamburg shipping lender by 2019 at the latest following a deal with the European Union to split it in two and unshackle it from more than 8 billion euros ($9.1 billion) in faulty loans.
The company, which is 85 percent-owned by the northern German states of Hamburg and Schleswig-Holstein, will be divided into a holding unit and an operating subsidiary, which is to be sold no later than 24 months after binding EU approval expected by the middle of 2016, HSH, its owners and the European Commission said in separate statements on Monday. The EU agreed in principle to HSH transferring or selling the loans in the restructuring that will keep the bank afloat, while ruling that it should be wound down if the sales process fails.