State-owned winding-up institution FMS Wertmanagement (FMS-WM) today announced that it is selling its 100-percent investment in Ireland’s DEPFA BANK plc (DEPFA) to Austria’s BAWAG P.S.K. AG based on a resolution adopted by the FMS-WM Executive Board, and approved by the FMS-WM Supervisory Board and the Federal Agency for Financial Market Stabilisation (FMSA). The sale brings the broad tender process launched by FMS-WM last summer to a successful close. The parties agreed not to disclose the purchase price of the transaction, which is still subject to approval by supervisory and antitrust authorities.
FMS-WM had acquired DEPFA from the Hypo Real Estate Group (HRE) in 2014. In the years that followed, FMS-WM succeeded in significantly reducing the total assets of DEPFA and its subsidiaries, lowering its administrative expenses and significantly increasing its Tier 1 capital ratio, among other achievements. Implementing the wind-up strategy also allowed FMS-WM to harness major synergies and improve refinancing costs over this entire period.
“Since acquiring DEPFA in December 2014, we have consistently used the value levers already identified at the time of the acquisition for their further unwinding and significantly exceeded even our own expectations with the results we achieved,” said Spokesman of the Executive Board Christoph Müller. “It was the interplay of efficiency improvements at DEPFA as well as some highly complex financial transactions between FMS-WM, DEPFA and third parties. The bottom line is that the sale marks what is a successful conclusion to the winding-up of DEPFA, also from the perspective of the German taxpayer.”
“The result achieved now once again emphasises that the decision made at the time not to sell DEPFA to an external bidder but instead wind it up under the direction of FMS-WM was undoubtedly the right one,” said Chairman of the FMS-WM Supervisory Board Dr. Michael Kemmer.
FMS-WM was founded in 2010 with the aim of winding up the risk positions and operations that were transferred to the company from HRE effective 1 October 2010. It is supervised by the Federal Agency for Financial Market Stabilisation. The Financial Market Stabilisation Fund is obligated without limitation to provide additional funds under Section 8a of the German Law Establishing a Financial Market and Economy Stabilisation Fund (Gesetz zur Errichtung eines Finanzmarkt- und Witschaftsstabilisierungsfonds - Stabilisierungsfondsgesetz) for losses incurred in winding up the portfolio.