GoldenTree Asset Management LP, the $16.6 billion credit hedge fund founded by Steven Tananbaum, plans to buy a “significant stake” in Bawag PSK Bank AG, Austria’s fourth-biggest bank, according to regulatory filings.
GoldenTree, based in New York, notified Austria’s antitrust authority Bundeswettbewerbsbehoerde about its plans on Nov. 16, the BWB said on its website today. The purchase may result in GoldenTree and Bawag’s owner, Cerberus Capital Management, having joint control of the Austrian lender, the filing showed.
Bawag said on Oct. 19 it’s in talks to bring in new investors to raise “a significant amount” of capital. Cerberus would keep a majority stake in the transaction under discussion, Bawag said at the time. Cerberus, the private-equity firm led by Stephen Feinberg, has said it “stands behind” the bank and will support “potential capital actions.”
GoldenTree plans to acquire about 40 percent of Bawag and will contribute 200 million euros ($255 million) of fresh capital to the bank, the Austria Press Agency newswire reported, without saying where it got the information. GoldenTree may also swap Bawag debt into equity in the transaction, it said. While Sabine Hacker, a Bawag spokeswoman, confirmed “ongoing talks” with investors, she declined to elaborate.
Bawag hasn’t produced returns for its shareholders since a Cerberus-led group bought the lender for 3.2 billion euros in 2006. It has to replace 170 million euros of hybrid capital it bought back in March and may need more capital to repay state aid and meet new rules from the Basel Committee on Banking Supervision.
Bawag was founded as the “Workers’ Bank” in 1922 by Karl Renner, a socialist and Austria’s first chancellor after World War I. The bank, which Cerberus bought from the Austrian trade union federation, lost money each year from 2007 to 2009, causing the New York-based private-equity company to inject 205 million euros into Bawag in 2009, with the Austrian state providing 550 million euros.
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