Hypo Real Estate
{{Infobox company
| name = Hypo Real Estate
| logo = Hypo Real Estate.svg
| logo_size = 230px
| type = Government-owned corporation
| foundation = {{start date and age|2003}}
| key_people = Manuela Better (acting CEO), Bernd Thiemann (Chairman of the supervisory board)
| num_employees = 1,419 (2011)
| industry = Financial services
| products = Commercial property financing, infrastructure and public finance, capital markets and asset management
| owner = SoFFin
| net_income = {{increase}} €257 million (2011)
| assets = €236.6 billion (2011)
| homepage = {{URL|http://www.hyporealestate.com/}}
}}
The Hypo Real Estate Holding AG is a holding company based in Munich, Germany which comprises many real estate financing banks. The company's activities span three sectors of the real estate market: commercial property, infrastructure and public finance, and capital markets and asset management. Hypo Real Estate is the second largest commercial property lender in Germany.{{cite news | url=https://www.nbcnews.com/id/wbna27023960 | title=Deal to save Germany's Hypo Real Estate fails | agency=Associated Press | work=NBC News | date=4 October 2008}}
The bank originated in 2003 from the real estate financing business of HypoVereinsbank. It employs about 2,000 people and was one of the 30 members of the DAX stock market index of the largest German companies between December 2005 and December 2008, before the shares were demoted to the MDAX. Its shares were further demoted to the SDAX in September 2009. In 2007 it acquired the public finance company Depfa Bank.{{cite news | url=https://www.reuters.com/article/markets/hypo-real-estate-to-buy-depfa-bank-for-57-bln-euros-idUSL2316169/|title=Hypo Real Estate buy of Depfa cleared by EU | agency=AFX News |work=Reuters | date=10 August 2007}} The company remains a legal entity as a wholly owned subsidiary of the Hypo Real Estate Group.
The firm received a bailout from the Deutsche Bundesbank and other German banks in October 2008 during the 2008 financial crisis, before approving a complete nationalization a year later.
Financial difficulties
=Crisis summits=
Hypo Real Estate encountered financial difficulties during the 2008 financial crisis, principally due to the heavy debt burden of its Depfa Bank subsidiary.{{cite news | url=https://www.marketwatch.com/story/germanys-hypo-real-estate-gets-thrown-a-lifeline-shares-drop | title=Hypo Real Estate's shares tumble after rescue | last=Kennedy | first=Simon | work=MarketWatch | date=29 September 2008}} On 29 September 2008, Finance Minister of Germany Peer Steinbrück announced that a €35 billion line of credit would be extended to Hypo Real Estate from the Government of Germany and a consortium of German banks.
After the first crisis summit, the supervisory board members independent from and unaffiliated to JC Flowers and Grove International Partners LLP resigned from the office. As successors, Michael Endres (chairman), Bernd Knobloch, Edgar Meister, Sigmar Mosdorf, Hans Jörg Vetter, Bernhard Walter and Manfred Zaß were appointed to the board.{{cite news | url=http://home.nestor.minsk.by/build/news/2008/11/2006.html | title=Changes to the Supervisory Board of Hypo Real Estate Holding AG | date=November 17, 2008}}
The deal fell apart on 4 October 2008 after the banking consortium involved pulled out. A second proposed bailout was agreed on 6 October, with German banks to contribute €30 billion and the Deutsche Bundesbank €20 billion to a credit line.{{cite news| url=https://www.propertyweek.com/news/hypo-real-gets-eu50-billion-government-led-bailout-/3124283.article | title=Hypo Real Gets EU50 Billion Government-Led Bailout | last1=Parkin | first1=Brian | last2=Suess | first2=Oliver | agency=Bloomberg News | publisher=Property Week |date=October 6, 2008}}
After the second crisis, summit some politicians demanded that HRE's top management resign, among them Federal Minister of Finance Peer Steinbrück who stated that he had been kept in the dark{{cite news | url=https://www.nytimes.com/2008/02/14/business/worldbusiness/14bank.html | title=German Bank Receives Its Third Bailout | first=Carter | last=Dougherty | work=The New York Times | date=February 14, 2008 | url-access=subscription}} and that it was "unthinkable" to keep dealing with them, especially after they had used lawyers against the government to attempt to evade responsibilities.{{cite news | work=Deutsche Welle | url=https://www.dw.com/en/german-government-under-pressure-to-deliver-on-crisis-promise/a-3694172 | title=German Government Under Pressure to Deliver on Crisis Promise | date=October 6, 2008}} CEO Georg Funke subsequently stepped down, replaced by Axel Wieandt on 31 October 2008.
=Further guarantees=
Via several steps, Hypo Real Estate was granted further framework guarantees by the German Financial Markets Stabilisation Fund (SoFFin) in February 2009, taking its total state funding to €52 billion.{{cite news | url=https://www.reuters.com/article/hyporealestate-guarantees/update-2-troubled-hypo-takes-more-help-from-german-govt-idUSLB10301220090211 | title=Troubled Hypo takes more help from German govt |work=Reuters | date=11 February 2009}}
=SoFFin takeover offer=
On 17 April 2009, SoFFin tendered an offer to take over Hypo Real Estate by buying and creating shares that would raise its equity stake to 90%. On 24 April 2009 the HRE governing boards recommended that shareholders approve the offer by the rescue agency.{{cite press release|url=http://www.hyporealestate.com/eng/pdf/042409_PI-Stellungnahme_Endfassung_Engl.pdf |title=Hypo Real Estate Holding AG issues Statement regarding the Takeover Offer by SoFFin |date=2009-04-25 |publisher=Hypo Real Estate Group |url-status=dead |archiveurl=https://web.archive.org/web/20110712234038/http://www.hyporealestate.com/eng/pdf/042409_PI-Stellungnahme_Endfassung_Engl.pdf |archivedate=2011-07-12 }} By that date, government support for the company had reached €102 billion. Under a law passed in March, the government could force the sale if shareholders reject it.{{cite news | url=https://www.dw.com/en/german-government-to-take-control-of-hypo-real-estate/a-4204982 | title=German government to take control of Hypo Real Estate | work=Deutsche Welle |date=April 24, 2009}}
Meanwhile, the German parliament formed a committee to investigate the HRE bailout. Opposition parties from the left and right spurred creation of the committee, while the governing centrist coalition abstained.{{cite news | url=https://www.dw.com/en/inquiry-into-hypo-real-estate-rescue-enters-final-phase/a-4560231 | title=Inquiry into Hypo Real Estate rescue enters final phase | work=Deutsche Welle | date=August 18, 2009}}{{cite news | url=https://www.reuters.com/article/us-hyporealestate-timeline-sb/timeline-hypo-real-estates-path-to-nationalization-idUSTRE5381WB20090409 | title=TIMELINE: Hypo Real Estate's path to nationalization | first=Marilyn | last=Gerlach | work=Reuters | date=April 9, 2009}}
=Nationalisation=
With the German state (via SoFFin) already owning 90% of HRE, an extraordinary general meeting on 5 October 2009 approved a €1.30 per share squeeze out of the remaining private shareholders,{{cite news | url=https://www.reuters.com/article/hyporealestate/update-3-hypo-real-shareholders-howl-at-berlins-squeeze-out-idUSL566426820091006?sp=true | title=Hypo Real shareholders howl at Berlin's squeeze-out | last=Maushagen | first=Peter | work=Reuters | date=5 October 2009}} including J.C. Flowers (which a year earlier had taken a 25% stake at €22.50 per share).{{cite news | url=https://www.reuters.com/article/sppage012-l16304596-oisbn/jc-flowers-taking-stake-in-battered-hypo-real-estate-idUSL1630459620080417 | title=JC Flowers taking stake in battered Hypo Real Estate | last1=Halstrick | first1=Philipp | last2=Nann | first2=Patricia | work=Reuters | date=17 April 2008}} The decision resulted in the complete nationalization of the firm within a year of it having been a DAX constituent.
Subsidiaries
- Hypo Real Estate Bank International
- Hypo Real Estate Bank
- Hypo Public Finance Bank
- Hypo Pfandbrief Bank International
- Depfa Bank
- DEPFA Deutsche Pfandbriefbank
References
{{Reflist}}
External links
{{Portal|Companies|Banks}}
- {{Official website|http://www.hyporealestate.com/}}
- [https://www.depfa.com/ DEPFA Bank] {{Webarchive|url=https://web.archive.org/web/20200429185904/https://www.depfa.com/ |date=2020-04-29 }}
- {{PM20|FID=co/025149|TEXT=Documents and clippings about|NAME=Württembergische Hypothekenbank AG}}
{{Great Recession}}
{{Authority control}}
Category:Banks established in 2003
Category:Real estate companies established in 2003
Category:Companies formerly listed on the Frankfurt Stock Exchange
Category:2003 establishments in Germany