Regulated information* – Brussels, Paris, November 3, 2008 – 3:00 PM
Dexia’s partner in Central & Eastern Europe, Kommunalkredit Austria AG (KA), is affected by the ongoing financial crisis, and has called for the support of the Austrian State. The partnership between Dexia and KA dates back to 1992 when Dexia took a 26% stake in KA, which was further increased to 49% in 2001 with the objective of developing its public finance franchise in Austria. KA and Dexia also invested in a joint venture – Dexia Kommunalkredit Bank (DKB) – to oversee operations in Central and Eastern Europe (CEE). DKB is held at 49% by KA and 51% by Dexia and controls the Group’s Public & Wholesale Banking operations in CEE countries, including Dexia Banka Slovensko, which is also active in retail banking.
As a consequence of the recapitalization plan of KA, Dexia (i) sells its 49% stake in KA, (ii) subscribes for EUR 200 million of preferred shares in KA, and (iii) buys the 49% stake of KA in DKB, raising its stake to 100%.
The impact of the whole transaction on Dexia’s accounts is estimated at a net loss of
EUR -105 million (to be booked in the third quarter).
* Dexia is a listed company. This press release contains information subject to the transparency regulations for listed companies.
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