Aug 21, 2008, 11:43 GMT
Frankfurt - Shares in ailing German business bank IKB Industrie Bank AG jumped Thursday after the nation's state-owned development bank Kreditanstalt fuer Wiederaufbau (KfW) announced it had sold its stake to the US private equity group Lone Star.
The decision by Dallas-based Lone Star to acquire a 90.8-per-cent holding in IKB has ended a nearly year-long search to find a buyer for the Dusseldorf-based bank, which has emerged as one of Germany's most prominent casualties of the US subprime mortgage market crisis.
'We plan to strengthen (the IKB's) position as a bank for small-to-medium sized business,' said Lone Star Germany GmbH chief executive Karsten von Koeller. Job cuts were not the primary goal, he said.
A spokesman for the KfW said that Lone Star had paid a 'low hundred million' figure for the IKB stake. This is considerably less than the 800 million euros which the German Government had hoped to raise from the sale.
IKB shares rocketed up by about 10 per cent to 2.93 euros after KfW announced the sale.
KfW was forced last year to throw IKB an 8-billion euro-financial lifeline as the global credit crunch triggered by the US mortgage industry upheaval took shape.
'A long period of uncertainty has come to an end and we can now plan for the future,' said IKB chief Guenter Braeunig welcoming the takeover.
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