The Austrian government on Monday nationalised Hypo Group Alpe Adria (HGAA), the countryâ??s sixth largest bank by assets.Austria will take over 100 per cent of HGAA after BayernLB, Grawe and the Austrian province of Carinthia agreed to give up their shareholdings and inject about â?¬1bn in capital.
"The risk situation of this bank represented an enormous threat to the republic of Austria, its financial industry and the whole economic area in the last days and weeks," Josef Pröll, finance minister, told reporters at the end of marathon talks with Georg Fahrenschon, his Bavarian counterpart, and shareholders. "We jointly could avert this threat."
Under the terms of the deal, BayernLB will sell its 67 per cent shareholding for a nominal â?¬1 and will inject a further â?¬825m of capital by waiving liabilities. It will also leave â?¬3bn of liquidity in the bank.
Carinthia will provide â?¬200m, reflecting its 12.4 per cent stake, and Grawe, the Austrian insurer, which holds 20.5 per cent, will contribute â?¬30m. Meanwhile, the Austrian government will inject up to â?¬450m.
