EU taking hard look at Austria's sale of Hypo's Balkan arm
VIENNA (Reuters) - The European Commision is casting a close eye over Austria's plan to sell the Balkans network of nationalised bank Hypo Alpe Adria to private equity firm Advent to see if it might entail a "hidden bail-out", Finance Minister Hans Joerg Schelling said.
The sale was agreed in principle last month. No financial details have been announced.
"We still have to check in terms of EU law whether we might be dealing with a potential hidden bail-out measure. The EU is very critical in this respect," Schelling told reporters before a cabinet meeting on Tuesday.
The Commission last year ordered Austria to find a buyer for the bank's Balkans network, its prime asset, by mid-2015 in return for approving state aid for Hypo.
Hypo, which Austria had to nationalise in 2009 after a decade of breakneck expansion at home and in former Yugoslavia, is hiving off other assets into a "bad bank".
Former Hypo owner BayernLB [BAYLB.UL] of Germany also still needs to sign off on the sale, Schelling said.
BayernLB has filed a complaint with Austria's Constitutional Court seeking to overturn a law that forces it to contribute 800 million euros to Hypo's wind-down costs.
Hypo has already absorbed 5.5 billion euros (4 billion pounds) in state aid, and Schelling said he could not say how much more might be needed. He said no agreement had been signed on the sale price.
"We assume that the contract is designed in a way that it shouldn't cost anything else because the position ... is that it's all mainly about refinancing lines, not a real purchase price," he said.
Hypo has said Advent International, which teamed up with the European Bank for Reconstruction and Development (EBRD) to bid, offered the required security so that 2.2 billion euros ($2.75 billion) in refinancing that stays in the Balkans network would be repaid.
(Reporting by Shadia Nasralla; Editing by Mark Potter)
