Since the acquisition in 2014, all value levers in the wind-up of DEPFA have been utilised
Total income from wind-up exceeds the purchase price paid in 2014 several times over
All funding lines of FMS-WM for DEPFA have been terminated upon the sale
State-owned winding-up institution FMS Wertmanagement (FMS-WM) and Austria’s BAWAG Group today closed the sale of Ireland’s DEPFA BANK plc (DEPFA). The purchase agreement was signed by both parties back in February. The parties have agreed not to disclose the sale price.
"The decision taken in 2014 not to sell DEPFA to a third party but to wind it up under the management of FMS-WM has proven right and highly successful," said FMS-WM CEO Christoph Müller. "We have fully delivered on the wind-up mandate for the DEPFA Group and significantly exceeded our own expectations with the value contributions achieved since its acquisition."
Furthermore, in the course of today’s closing all of FMS-WM’s remaining funding lines for the DEPFA Group were terminated.
In December 2014, FMS-WM had acquired DEPFA from the Hypo Real Estate Group (HRE) at a price of EUR 320 million. The acquisition of DEPFA hybrid capital bonds carried out immediately after the purchase alone generated an earnings contribution of EUR 377 million for FMS-WM. In addition, the takeover of assets from the DEPFA Group will result in significantly higher interest income for FMS-WM for several years. The DEPFA Group's total assets were reduced from EUR 48.5 billion at the end of 2014 to EUR 2.5 billion at the end of 2020. This has considerably enhanced the saleability of the DEPFA Group and also enabled DEPFA to pay a dividend of EUR 150 million to FMS-WM at the end of 2020, which is also part of the wind-up result. These earnings contributions and the sales proceeds now achieved lead to a total result that is several times higher than the purchase price paid for the DEPFA Group in 2014.
“By selling the DEPFA Group, FMS Wertmanagement is taking another important step in dealing with the consequences of the financial crisis. I would like to thank all those involved for their extremely successful work. I am delighted with the excellent result of the DEPFA wind-up, which will be welcome by the taxpayers in particular," says Dr. Jörg Kukies, State Secretary at the Federal Ministry of Finance.
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. FMS-WM 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.