Eurohypo could make a mass secondary offering of shares as soon as the summer, Bernd Knobloch chief executive, said yesterday. He told Handelsblatt, the business daily: 'We will be ready for the capital markets in the second half of the year. Real estate banks are in fashion at the moment.'
Currently, the group has only a 2 per cent free float, with the balance controlled by the big banks Deutsche Bank, Commerzbank and Dresdner Bank, out of which it was spun three years ago.
The offering could come hot on the heels of an IPO by Premiere, which on Monday said it planned to raise up to â¬500m ($653m) as early as March. Both plans are seen by the market as ambitious, given the scant appetite for German IPOs last year.
There were only five flotations in Germany last year, including a messy â¬1.6bn listing by Postbank, the post office bank.
Eurohypo has been preparing aggressively for a full market listing, reflecting the desire among its shareholder banks to distance themselves from a non-core business that cost them hundreds of millions of euros in bad debt provisioning.
When Eurohypo was spun off, the banks were forced to back it with â¬1bn of provisioning guarantees.
In November, the group struck a deal with Citigroup to manage â¬2.4bn of bad debts. A further â¬1.4bn of bad debt could now be handled by that platform.
When Eurohypo was created, the partners pledged to increase the initial 2 per cent free float to 25 per cent by the end of 2004. The scale of the balance sheet clean-up delayed the operation. The plan now is to float more than 50 per cent.
Source: Financial Times