Sparekassen Østjylland agreed to move its assets and liabilities excluding guarantee and other subordinated capital to Financial Stabilitet A/S, as it was determined the bank had no chance to continue its operations as an independent entity. Following this the bank’s management is resigning and it is declaring bankruptcy.
Several interested competitors were bidding and negotiating over the assets during the weekend. In the end Financial Stabilitet A/S is selling almost the entire operation, including some 3.9 billion of deposits and 3.4 billion of loans, to nearby Sparekassen Kronjylland, which has confirmed it in a press release.
The remaining about 30 corporate loan and guarantee exposures totalling some 1.4 billion will remain under a new subsidiary of Financial Stabilitet A/S called Sparebank Østjylland af 2012, onto which Financial Stabilitet A/S will inject capital.
The transaction means that nearly depositors and other customers shoud see no changes on Monday. Sparekassen Kronjylland is significantly larger bank with 38 branches and 470 employees. Depositors and unsecured creditors will be covered. Sparekassen Østjyllans’ guarantors and other subordinated debt holders will lose their investment.
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