Privatization bid

US investors close in on HSH Nordbank

FILE PHOTO: A container ship is loaded at a terminal in the harbour of Hamburg
Deal ahoy! Hamburg-based HSH was once the world's largest provider of shipping loans. Source: Reuters

Many ship owners have experienced nervous waits for their ships to return to harbor after a storm. The same thing could be said of the owners of HSH Nordbank, the troubled publicly owned bank that was once the world’s largest provider of shipping loans: They have long waited for good news – in the form of a rescue deal – to appear on the horizon.

That now seems likely. The German states of Hamburg and Schleswig-Holstein are in exclusive talks with US financial investors Cerberus and J.C. Flowers about the privatization of HSH, which has dual headquarters in Hamburg and Kiel. Sources in the financial sector say promising progress is being made, and the contracts are expected to be ready to sign by the end of February.

The US investors are said to be willing to pay €700 million ($875 million) to €1 billion for the bank, a lot more than anticipated at the beginning of the process. Even if the deal goes ahead as planned, however, that doesn’t mean that champagne corks will be popping. The state owners are expected to be left with losses of billions.

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