The purchase price in the their bid, as reported by the Austrian Kronen Zeitung, will be “no more than EUR 100 million”, but most importantly the taxpayer will have to hope that the bank manages to raise sufficient funds from the market to repay their money to the Republic of Austria. Over the past 2 weeks, various Austrian press, most notably, an investigative piece in the reputable weekly Format, report that the Eastern European consortium proposed to guarantee the repayment of the public funds along with a long-term vision for the development of the bank’s business in their "home" region, yet the same reports name Advent as the preferred bidder that may be about to close the deal. It seems that this is about where the good news end. Eventually, the Austrian press reports that only two bidders have reached the final round – the American hedge fund Advent International, and a consortium of the Bulgarian Via Group with Ukraine's 4th largest bank, Delta Bank, supported by the 2nd largest Russian banking group, VTB. ![]() The process of re-privatization of Hypo’s SEE subsidiaries in Croatia, Slovenia, Serbia, Bosnia & Herzegovina and Montenegro started back in early 2013 attracting a number of suitors, some more serious than others. To guarantee the repayment of this money (estimates put it between EUR 2.0-2.5 billion) is exactly the biggest political and financial challenge for the Austrian Government in this process and the intense public attention to that is no surprise. The biggest challenge of all of course still lies ahead, to sell the “good” part of the bank’s core business in 5 of the successors of former Yugoslavia, where, over the last 10 years, it gained substantial market share generously funded by the Austrian taxpayer. It seemed that the strategy started to work really well – a new management was installed that initiated a serious restructuring program to improve the operational performance of the Bank despite the severe limitations imposed by the European Commission, an immensely complicated project to separate the toxic assets (the bad loans) was successfully implemented and the Austrian operations were successfully sold and under their new owner managed to turn around its fortunes. ![]() To achieve this challenging task the patient needed some radical treatment – some mighty dose of toxic loans accumulated during the ill-managed growth of the bank needed to be brushed out into a so-called “bad bank” unit and any “healthy” parts to be seriously restructured and sold to the best bidder who would guarantee the repayment of the public funds invested to keep the ailing bank alive. ![]() When in early 2013 the Austrian Government set off to finally resolve and end once and for all the long-lasting drama around the troubled Hypo Alpe Adria Bank, it seemed that it had picked the most reasonable (or the only reasonable) strategy – to stop the leakage of tax payers' money, to guarantee the repayment of the funding extended so far and to ensure that as much as possible of the Hypo’s network will survive and continue to operate. Look who is lurking again behind the corner – the tandem of Advent International and Deutsche Bank, respectively the buyer of the Bulgarian Telecom Company in 2004 and the advisor of the Bulgarian government in the sweetest deal of the past decade, seem to have teamed up again, in the same capacities, to do the sweetest deal of this decade – the final rip-off of the Austrian state, in the re-privatisation of Hypo Alpe Adria.
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