HSH Nordbank, the leading financier of container ships, is up for sale as its long-awaited privatization has kicked off with a February 27 deadline for potential buyers to express interest in the German state-owned bank.
The European Union ordered the federal states of Hamburg and Schleswig-Holstein to sell their majority 85 percent stake in the bank last May in return for authorizing a 3 billion-euro ($3.22 billion) increase in government loan guarantees to 10 billion euros in 2013.
HSH Nordbank, once the world’s largest ship financier, with a 30 billion-euro loan portfolio in 2010, ranging from container ships for German owners to bulk carriers and tankers, was a major victim of the shipping collapse, which hit container ships the hardest, following the 2008 and 2009 global financial crisis.
The company announced in December that its exposure to the shipping industry has shrunk to 7.1 billion euros as it unveiled a $1 billion loss.
German banks, including NordLD and DVD, account for around one-quarter of the world’s shipping loans worth about $100 billion, which they are still frantically trying to offload.
Commerzbank, Germany’s third-largest bank, has slashed its shipping portfolio from 18 billion euros to 5 billion euros since the crisis erupted.
Another prominent ship financier, Bremer Landesbank, collapsed last summer owing to non-performing loans and was taken over by NordLB.
US bank Citigroup, which is advising the states of Hamburg and Schleswig-Holstein in the privatization process, has said it expects indicative bidding offers by March 31.
Fears that taxpayers will have to meet the bill for floundering ship financiers flared over the weekend when the German public broadcaster ARD said the two federal states might have to offer 20 billion euros in credit guarantees for banks with nonperforming ship loans.
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Source: JOC
