TIMELINE-Hypo Real Estate's path to nationalisation
March 29 (Reuters) - The German government has agreed to take an initial 8.7 percent stake in stricken lender Hypo Real Estate HRXG.DE as a prelude to acquiring full control, the bank said on Saturday.
The move comes as Hypo said it lost 5.38 billion euros ($7.2 billion) before tax in 2008 and it needed state backing to meet regulatory capital requirements. [ID:nLS237697]
Following is a chronology of Hypo Real Estate's decline:
November 2007: Chief Executive Georg Funke says the company was not able to entirely avoid the effects of the financial market crisis, but would emerge from the crisis strengthened. The company's shares stand at 37 euros.
January 2008: Hypo Real Estate unexpectedly says it is taking a 390 million euro writedown on U.S. securities. The company's stock drops 35 percent to less than 22 euros.
April 2008: U.S. financial investor J.C. Flowers agrees to buy jointly with two other investors almost a quarter of Hypo Real Estate for 1.1 billion euros.
September 2008: A lifeline thrown by the German government collapses and is replaced days later with a new rescue plan that sees support from the state and fellow banks at 50 billion euros. The stock falls below 5 euros.
October 2008: Chief Executive Georg Funke steps down and Hypo becomes Germany's first listed bank to tap the government's 500 billion euro rescue fund.
December 2008: Hypo becomes the subject of a probe by prosecutors into whether the company had disclosed its risks in a timely manner. Days before the Christmas holidays, Hypo says it will restructure its business and cut around 40 percent of its workforce. Its stock falls below 3 euros.
January 2009: German finance ministry seeks changes to the law that would allow the government to nationalise companies, paving the way for Berlin to take a majority stake in Hypo. New CEO Wieandt said more financial holes were appearing and the bank might need more aid. The company's stock slips below 2 euros.
February 2009: The German government agrees on a legal proposal that would allow it to seize control of Hypo, shouldering aside shareholders including J.C. Flowers.
March 2009: The German government says it will take a stake in Hypo Real Estate and plans to seek full control of the company, which expects billions of euros in losses in 2008 to be followed by at least two more years in the red. The stock stands at 1.14 euro, having recovered from levels as low as 0.64 euros. Related stories: FACTBOX-Key facts on Germany's proposed nationalisation law [ID:nLK46557] German government to take stake in Hypo Real Estate [ID:nLS237697]
(Compiled by Christian Kraemer; Writing by Maria Sheahan; Editing by Rupert Winchester)
