The fallen Franco-Belgian bank Dexia said today it had finalised the sale of a 90% stake in its Luxembourg unit to a Qatari investment fund.
"Precision Capital, a Qatari investment group, will acquire 90% of Dexia's stake in Banque Internationale Luxembourg," Dexia said in a statement.
It added that the state of Luxembourg will acquire the remaining 10% as part of the deal.
"The transaction price for the stake of Dexia in Banque Internationale Luxembourg is €730m,'' it said.
It also said that the closing of the deal was still subject to regulatory approval, including from the European Commission which opened an in-depth probe into the sale on Tuesday.
The transaction includes BIL's retail banking operations, with the asset management and investment arms remaining in Dexia's hands.
First bailed out in 2008 at the height of the global financial crisis, Dexia could not cope with the turmoil of the euro zone debt quagmire and in October, France, Belgium and Luxembourg stepped in to wind up the bank and restructure or sell off viable operations. Plans to sell off Dexia BIL's retail operations to the Qatari fund were announced in November.
Dexia said the transaction would result in BIL having "a strong capital position at closing corresponding to a 9% Common Equity Tier 1 ratio under Basel III." European banks are required to meet that global regulatory standard for capital adequacy by the end of June.
On Tuesday, the European Commission said it was launching an in-depth probe into the sale to verify whether it has been "conducted on market conditions and therefore does not contain any state aid element."
"Given that the proposed sale is the result of exclusive negotiations with one private investor, the Commission has opened an in-depth investigation to assess whether the price of the transaction" is in line with its market valuation, it said in a statement.
In December, the European Commission gave the governments three months to come up with a restructuring plan, or a liquidation plan if Dexia does not prove to be viable.
The Commission gave temporary approval to state guarantees of up to €45 billion. The three countries initially wanted €90m in guarantees. It said the guarantees were unlikely to be in line with EU single market rules but were necessary in order to preserve the financial stability of the member states concerned.