FRANKFURT, Dec 6 (Reuters) - Ailing German public sector bank NordLB aims to shortlist two final bidders for the sale of up to a 49 percent stake by Sunday, with a view to signing a deal by the end of January, people close to the matter said.
Buyout groups Cerberus, Apollo and Centerbridge were among the four bidders which submitted final bids by a late November deadline, but the deal is unlikely to be wrapped up soon as the bidders had been asked to elaborate on their offers, sources said earlier this week.
NordLB and the bidders declined to comment on Thursday.
All three buyout groups have long track records of bank investments.
Cerberus, a minority shareholder in Deutsche Bank and Commerzbank, earlier this year bought NordLB peer HSH Nordbank.
Apollo owns Bremer Kreditbank, formerly KBC Germany, Bankhaus Neelmeyer as well as Oldenburgische Landesbank. The investor was runner-up in the HSH privatisation.
Centerbridge, which is working with senior bank advisors Axel Wieandt and Frank Mattern on its NordLB bid, is invested in Italy’s Banca Farmafactoring, Walmart Canada Bank and has in the past provided capital to UK lender Aldermore.
Separately, NordLB remains in talks over the sale of two portfolios of a combined 6.5 billion euros ($7.4 billion) in non-performing ship loans, which it expects to sell at heavy discounts. The ship loan sale is contingent on the stake sale as the writedowns on the loans account for the bulk of NordLB’s capital needs.
NordLB said that the ship loan sale may lead to a temporary decrease of capital ratios and a potential balance sheet loss.
To shore up its balance sheet and to arrive at a targeted core tier equity ratio of 13 percent - necessary for acceptable ratings as a corporate bank - NordLB hopes to boost its capital by about 3.5 billion euros.
Roughly half of the money is expected to be raised through the sale of up to a 49 percent stake, while and the rest would come from the regional state of Lower Saxony, would remain majority owner. Other current minority investors are expected to be heavily diluted.
A potential sale of NordLB’s retail banking unit Braunschweiger Sparkasse - which the state’s regional savings bank association hopes to keep within the savings bank family - would lower the total capital need at NordLB, the sources said.
The Braunschweiger Sparkasse may be valued at its book value of roughly 600 million euros, one of the people said.
The three investors have presented variations of their offers in- and excluding the Braunschweiger Sparkasse, they said.
While public-sector lender Helaba did not hand in a formal offer for NordLB last week, talks between NordLB and Helaba stakeholders continue on whether a public-sector solution can be found. (Reporting by Arno Schuetze Editing by Douglas Busvine and Susan Fenton)