Sweden - HQ Bank story worse than Carnegie
Wednesday, 9 June 2010 | 
Finance - Banki...
New losses forces Swedish HQ Bank to dump its subsidiary HQ Fonder in a anxious move to immediate strengthen its capital base. Shares in Swedish investment bank HQ Bank dived almost 25 percent in Tuesday morning trading after the troubled firm announced new costs connected to its bleeding trading operations and a surprise sell-off of its fund unit. "Clearly trading losses have been larger than what the bank first said", Nordea Markets analyst Maths Liljedahl told the Dagens Industri website. "This is serious".
Two weeks ago the Stockholm-based investment bank said it would sell its loss-making trading operations and ask shareholders for 559 million kronor ($78 million) in a guaranteed right issue, following "intensified financial turmoil" and "markedly changed market conditions". Reactions from the market were grim, the stock dived and few days later its chief executive officer Mikael König stepped down. Now the troubled firm cancels the planned right issue – and instead sells its fund unit HQ Fonder Sverige for 850 million kronor to Investment AB Öresund -- HQ's biggest shareholder -- in a distressed move to immediately strengthen its capital base. The fund unit has around 30 billion kronor under management. HQ also intends to conduct a rights issue of up to 1 billion kronor. The rights issue is being conducted in order to enable a re-purchase of the fund unit and assure financial stability.
Thus far during the second quarter, the loss within the trading operations amounts to 297 million kronor, the investment bank said. The cost of conducting the accelerated closure is believed to have increased, and will arise earlier, than in HQ's estimate as of May 26, 2010. "In order to be able to expeditiously conduct an accelerated closure of the Trading operations there is a requirement to immediately strengthen the capital base", HQ Bank said.
HQ Bank, formerly known as Hagströmer & Qviberg AB, is listed on the Stockholm stock exchange and describes it self as an “ideas-driven bank for major investors”. Shares in HQ are down by 46 percent compared to a month ago.
End-story of Carnegie: http://www.asymptotix.eu/content/eu-commission-dg-competition-state-aid-overview-national-measures
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