REFILE-German IKB says sales process in decisive phase
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FRANKFURT, July 3 (Reuters) - German subprime crisis casualty IKB (IKBG.DE) said the bidding process for the sale of state development bank KfW's [KFW.UL] 45.5 percent stake in the company had reached a decisive phase.
IKB said the result of the sale process would be of "great importance to the future of the bank" and added that the effects of the crisis hitting it would continue to have a substantial impact in the current 2008/09 fiscal year.
"This includes particularly the restriction in new business since August 2007, the large increase in refinancing costs and the high consultant costs," IKB said in a statement on Thursday.
"Once restructuring is complete, the bank is expected to have a substantially different earnings structure and lower earnings level overall, because the income from portfolio investments will decline significantly."
IKB became one of Germany's highest-profile casualties from the collapse in risky U.S. home loans after it piled up roughly 17.5 billion euros ($27.6 billion) of subprime-linked investments.
Sources with direct knowledge of the situation told Reuters on Wednesday that U.S.-based Ripplewood Holdings had made the most attractive offer for the Duesseldorf-based bank, whose market capitalisation is around 270 million euros.
Swedish bank SEB (SEBa.ST) and U.S. group Lone Star [LS.UL] were also in the running, the sources said. Binding offers are due by July 17. A final decision on the sale, long in doubt due to limited buyer interest, is due by September.
IKB said on Thursday it had an after-tax loss of 24 million euros in the year ended March 31, less than the 200 million it had previously forecast because of "significantly lower deferred taxes than initially expected".
IKB began the planned sale of securities from the higher-risk component of its portfolio investments last month and added that it had so far sold tranches with a nominal value of 450 million euros. ($1=.6335 Euro) (Reporting by James Regan; Editing by Clarence Fernandez)
