Nordea sale put on hold by Swedish government – cites state of markets
The Swedish government’s sale of a further stake in Nordea has been postponed because of concerns over ongoing market volatility.
The government announced that any sale will not take place before mid-August at the earliest, and will then continue in the form of smaller tranches put to the market over a longer period.
This approach is intended to guard against short-term market volatility that otherwise would undermine the government’s target of realising a gain from the sale of its assets.
“There are expectations of a near-term additional reduction in the state’s holding in Nordea. A sale in the current investment climate is, however, not current. By being transparent on this we want to create improved predictability,” said Peter Norman, minister for financial markets at the Ministry of Finance.
“I think the unrest we see on financial markets shows that the state should not own bank shares. Proceeds from the sale will cut Sweden’s debt and thereby its vulnerability,” he added.
The sale will only proceed if the government feels it is in its best interests, the department stated.
The sale was announced earlier this year as a way for the government to realise a return on the money invested to prop up Nordea through the financial crisis. The state still owns about 544 million shares or 13.4% of outstanding equity in the bank, worth about SEK36bn (€3.9bn). It sold 255 million shares worth about SEK19bn on 4 February this year.
The government said that the method of selling off smaller tranches over time copied the method used by the US government to sell of its interests in Citgroup.