Austrian Finance Minister Maria Fekter will ask the European Union’s competition chief for more time to find buyers for the assets of nationalized lenders Hypo Alpe-Adria Bank International and Kommunalkredit Austria AG, said two people familiar with the talks.
Fekter will seek to extend the June deadline for the sale of Kommunalkredit and to win more time for Hypo Alpe-Adria, according to the people, who asked not be identified because they aren’t authorized to talk about the issue in public. Fekter is meeting Joaquin Almunia tomorrow in Brussels, according to the EU competition commissioner’s diary published on his website.
Hypo Alpe was nationalized in 2009 after former owners including Bayerische Landesbank walked away and has been supported by Austrian tax money with 1.76 billion euros ($2.3 billion) of capital and with bond guarantees since. It has hired banks to sell its viable parts based in Austria, Italy and the former Yugoslavia.
Hypo Alpe-Adria, based in Klagenfurt, faces potential losses of as much as 6 billion euros should the European Commission force disorderly asset sales, Chief Executive Officer Gottwald Kranebitter said last month. An EU-imposed fire sale would mean that the “Austrian state would face further capital injections,” he said.
Kommunalkredit, a municipal lender whose bailout has cost taxpayers more than 2 billion euros so far, has attracted potential buyers including Apollo Global Management LLC (APO:US) and Oesterreichische Kontrollbank AG. Austria had until the end of March to report about its progress with the sale.
Finance Ministry spokesman Gregor Schuetze declined to elaborate on the subject of the meeting with Almunia, as did Antoine Colombani, a spokesman for the Brussels-based commission.
Kommunalkredit’s June deadline was set when the commission approved the state aid it received. The Austrian government’s support for Hypo Alpe has yet to be approved. The lender filed a new restructuring plan in February.
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