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Austria launches sale of Kommunalkredit
July 26, 2012 / 7:08 AM / in 5 years

Austria launches sale of Kommunalkredit

VIENNA (Reuters) - Austria has launched the sale of nationalized bank Kommunalkredit Austria AG, a deal it hopes to wrap up by mid-2013 in line with European Union rules on state aid.

The logo of Kommunalkredit is pictured in front of its headquarters building in Vienna, March 5, 2012. REUTERS/Heinz-Peter Bader

An advertisement published in the official gazette on Thursday said U.S. investment bank Morgan Stanley (MS.N) would serve as exclusive adviser to the Austrian government for the sale. Expressions of interest are due by August 16.

Austria had to take over the lender in 2008 as the financial crisis erupted.

The bank, formerly owned by Oesterreichische Volksbanken OTVVp.VI and Dexia (DEXI.BR), was split up into a healthy part Kommunalkredit Austria and a “bad bank” called KA Finanz.

Hits on Greek debt tipped Kommunalkredit, now a public-sector infrastructure finance specialist, to a loss of nearly 149 million euros ($180.6 million) last year. Chief Executive Alois Steinbichler had forecast a 2012 profit.

($1 = 0.8248 euros)

Reporting by Michael Shields; editing by James Jukwey

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