Denmark’s FIH Erhvervsbank in talks to sell real estate division

Copenhagen-based FIH Erhvervsbank has confirmed it is in negotiations that could see DKK15bn (€2bn) of property related lending demerged into a new firm that would be sold to the Danish government’s Financial Stability Company tasked with taking over the assets of distressed banks.

The confirmation came after further local media speculation around the future of the bank, which specialises in customised financial solutions and lending to Danish corporates and SMEs.

The bank’s property finance business is focused on advisory services relating to Danish, Swedish and German properties, with debt lent against “first-priority pledges on the underlying real estate.”

“It is correct that negotiations are ongoing on a possible demerger of companies in the FIH Group,” said managing directors and co-CEOs Bjarne Graven Larsen and Henrik Sjøgreen in a statement posted on the bank’s website.

“This would lead to a demerger of property-related lending for about DKK15bn into a new company that is intended sold to Finansiel Stabilitet A/S (The Financial Stability Company). It is the intention that FIH and/or FIH Holding A/S guarantees any losses in the newly formed company, and the Financial Stability Company provides financing for the daughter company for the coming years.

“A completion of the transaction contributes to addressing the refinancing task FIH is facing in the years to come as the government-guaranteed bond issues of FIH expire.

“The transaction will, in case it becomes effective, be on a voluntary basis and upon FIH’s own desire.

“For the time being we cannot comment any further on this.”

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