From today’s perspective, the 2008/09 annual result (1 April 2008 to 31 March 2009) of IKB AG in line with the German Commercial Code (HGB) will be in the range of minus € 600 million. After loss participation from profit participation certificates and silent partnerships the balance sheet deficit will be about minus € 400 million. The current worsening of the results expectation is due to resolutions on a further reduction of risks on the IKB balance sheet and a reassessment of the necessary provisions for possible loan losses for the whole financial year.
In its meeting held today, the Supervisory Board of IKB Deutsche Industriebank appointed Dr. Michael H. Wiedmann (44), previously Managing Director of investment banking at Morgan Stanley in Frankfurt, to the IKB Board of Managing Directors from 1 March 2009. Wiedmann succeeds Dr. Andreas Leimbach, who departed from the Bank on 1 February 2009.
In the first six months of the financial year 2008/09 (1 April to 30 September 2008), the consolidated results of IKB Deutsche Industriebank amounted to € 250 million (H1 2007/08: € 965 million).
The Special Fund for the Stabilization of the Financial Market (Sonderfonds Finanzmarktstabilisierung – SoFFin) authorises guarantees to IKB in an amount of up to € 5 billion to guarantee the repayment of bonds to be issued by IKB in the future. The guarantees have been authorised by the EU Commission today.
The Board of Managing Directors of IKB Deutsche Industriebank AG –with the consent of the Supervisory Board – today resolved to issue subordinated convertible bonds in an amount of up to € 123.75 million. IKB expects that Lone Star will fully subscribe the portion of convertible bonds which will not be subscribed by the shareholders of IKB by exercising their pre-emptive rights. The purchase of the convertible bonds forms part of the announced increase in the own funds of IKB by Lone Star in an aggregate amount of € 225 million.
The IFRS group interim financial statements of IKB Deutsche Industriebank AG for the 2nd Quarter 2008/09 (1 July until 30 September 2008) will include positive valuation effects of presumably € 1.0 billion in total based on preliminary calculations. In the first Quarter 2008/09 similar valuation effects resulted in a loss of € 0.5 billion; thus, for the first half year 2008/09 the valuation effect is + € 0.5 billion.
Today the Supervisory Board of IKB elected Mr Bruno Scherrer (39), Head of European Investments and Senior Managing Director of the US Investor Lone Star, Chairman of the Supervisory Board. Moreover, the Supervisory Board appointed Mr Hans Jörg Schüttler (53), formerly CEO Asia and until 2006 CEO Germany of the Investment Bank Morgan Stanley, new Chairman of IKB’s Board of Managing Directors with effect of 1 November 2008.
Today KfW Bankengruppe has transferred its shares in a volume of about 90.8% of IKB’s nominal share capital to the US-American financial investor Lone Star and thereby fulfilled the share purchase agreement signed in August 2008. Hence, Lone Star (LSF6 Europe Financial Holdings L.P.) is the new major shareholder of IKB AG.
Today, the capital increase resolved by the IKB shareholders’ meeting on 27 March 2008 was registered in the Commercial Register in the amount of € 1,250,000,000.00.
Today the EU Commission has announced that the state aid measures IKB has been receiving since the beginning of the crisis in July 2007 have been authorised subject to conditions imposed. These conditions include a considerable reduction in the business operations of IKB, the discontinuance of the business segment real estate finance and the closure of several foreign offices. It is intended to reduce the balance sheet total to €33.5 billion (from currently €47.7 billion as per 30 June 2008 or €63.5 billion as per 31 March 2007, prior to the beginning of the IKB crisis, respectively) till September 2011.
In the first three months of the 2008/09 financial year (1 April to 30 June 2008) IKB Deutsche Industriebank reported a consolidated new loss of €540 million (previous year: €502 million). Dr. Günther Bräunig (52) will remain as CEO until 31 October 2008. The mandate held by Dr. Dieter Glüder (52) has been extended by three years to 15 October 2011.
Until the expiration of the time period in connection with the capital increase of IKB Deutsche Industriebank Aktiengesellschaft on 14 August 2008 at midnight, during which shareholders could revoke their declaration to exercise their subscription rights, the declaration to exercise subscription rights has been revoked in respect of 187,155 shares. Thereby, the exercise of subscription rights in respect of a total of 265,145,379 new shares from the capital increase has been declared and not revoked. Thereof, 264,152,886 shares relate to KfW Bankengruppe.
By the end of the subscription period for the capital increase of IKB Deutsche Industriebank Aktiengesellschaft on 11 August 2008 for 265,306,116 shares the exercise of subscription rights has been declared. Thereof declarations in respect of 264,152,886 subscription rights are from KfW Bankengruppe, in accordance with its actual share in IKB of 45.5 per cent.
Today, KfW and IKB Deutsche Industriebank Aktiengesellschaft signed the commitment of KfW towards IKB announced in the notification dated 22 July 2008 pursuant to which KfW will subscribe for, or procure that a third party subscribes for, such amount of shares issued under the capital increase resolved by the general shareholders’ meeting of 27 March 2008 that IKB receives proceeds totalling € 1.25 billion. This commitment by KfW is subject to the condition precedent that the European Commission reaches a decision by 25 October 2008 that KfW’s participation in the capital increase does either not constitute state aid or is approved as state aid. A decision by the European Commission is expected in October 2008.
The Board of Managing Directors of IKB Deutsche Industriebank AG has determined, with approval of the Supervisory Board, on 25 July 2008 the details of the capital increase resolved by the shareholders’ meeting on 27 March 2008. The resolution of the shareholders’ meeting was entered into the commercial registry on 25 July 2008.