largest public-sector finance providers, has become the first
Austrian bank to be nationalized by the state government.
The bank was 49% owned by the Franco-Belgian group Dexia and
50.78% owned by Austria’s Volksbank. Both parties were paid a
symbolic price of €1 each.
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Kommunalkredit was hit with a liquidity shortage as a result of
the global credit crunch and write-downs connected to the collapse
of the Icelandic banking sector.
Providing finance to primarily the public sector, Kommunalkredit
offered loans and leasing facilities, as well as structured finance
products and the purchase of receivables.
Under the terms of the deal, Dexia will also buy out
Kommunalkredit Austria’s 49% stake in their joint venture, Dexia
Kommunalkredit Bank (DKB), taking full ownership of the business.
DKB offers long-term public-sector financing solutions throughout
the CEE region.
As a result of the transactions, Dexia will be hit with a €105
million net loss. Dexia originally bought a 26% shareholding in the
Austrian group in 1992, raising its holding to 49% in 2001 with the
objective of developing its public finance franchise in
Austria.
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