Dexia AM sale could be finalised next week

Negotiations over the sale of Dexia Asset Management to two Chinese private equity firms could be signed next week, according to Reuters.

The sale, which is part of the dismantling of the Franco-Belgian financial group Dexia, was in June given a value of €750m. The FT gives its current value as €500m. Hony Capital and GCS Capital have been selected as preferred bidder, according to the FT.

Dexia, formerly one of the world’s largest lenders, has been struggling to divest businesses after it became the first bank to be rescued during the euro zone crisis. Belgium, France and Luxembourg joined forces to bail out the lender last October after it was brought down by a funding crunch.

Divisions of Dexia that have already been sold off include Banque Internationale a Luxembourg, a 50% stake in RBC Dexia Investor Services and Turkey’s DenizBank to Russia ’s Sberbank for €3.1bn.

One of China’s largest private equity groups, Hony Capital, is teaming up with GCS Capital and the pair has been selected as the preferred bidder to buy the business, the FT said.

An agreement in principle was reached during talks in Paris on Wednesday, and is due to be signed next week.

France is meanwhile struggling to find new sources of financing to replace Dexia, which until recently was its dominant lender to local governments and other public entities like hospitals.

France’s La Banque Postale, which has been designated to succeed Dexia as the country’s main municipal lender, said earlier this month it would double its capacity to lend to local governments after a spike in demand for credit.

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