Hypo Group Alpe Adria’s sale approved by Commission
The European Commission has approved a plan to orderly wind down the Austrian bank Hypo Group Alpe Adria (HGAA).
Together with the approval of the plan, the Commission cleared both the aid hitherto granted to HGAA and additional aid possibly required for the wind-down.
Commission Vice President in charge of competition policy Joaquín Almunia said: “After a long time spent trying to agree on a plan to reestablish a viable business model for HGAA, the moment has come to adopt a final decision that closes this chapter once and for all, gradually restores the level playing field in the market and minimises the cost for taxpayers, who have already paid a high price.”
According to the plan the operative parts of the bank will be sold while the non-viable remainder is put into an orderly wind-down process. A sales contract for the Austrian subsidiary was already signed in May and the South-Eastern European network will be sold by 30 June 2015 at the latest.
Until the sales process is complete, Austria commits to a number of restrictions for new business, in particular relating to risk control, thus ensuring that the marketability of the subsidiaries is enhanced and that competition distortions are kept to a minimum.
The approval of the plan closes one of the longest lasting state aid cases in the banking sector since the outbreak of the financial crisis. HGAA received a first aid measure from the Republic of Austria already in December 2008. Since then a number of further public support measures have been taken in favour of the bank. All together it has received €2.85bn in capital or guarantees on capital, €300m in guarantees on assets, and €1.35bn in refinancing guarantees. The plan was notified by Austria on 29 June 2013.
Hypo, which had already agreed to sell its Austrian unit in May, will be required to divest its Balkans network by June 2015.