IKB Deutsche Industriebank AG / Miscellaneous
13.02.2008
Release of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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IKB has revalued its on balance portfolio investments which currently total
5.9 billion Euros. The valuation losses exceeding the existing risk shield
provision currently amount to about 950 million Euros of which a
substantial proportion relates to assets held by IKB International SA,
Luxembourg.
The expected valuation losses of about 950 million Euros are made up of a
valuation loss of about 630 million Euros in a portfolio on the balance
sheet of IKB which contains currently about 3.1 billion Euros worth of
assets. This portfolio includes assets carrying a higher probability of
default, specifically, assets with a high mark to market volatility, assets
with a high subprime element and so called first loss pieces. The
valuation loss of about 630 million Euros is in excess of the first loss
piece of 1 billion Euros which will be assumed under the risk shield
provided by KfW and the pool banks on this particular portfolio. In the
current market environment, a sale of the portfolio could only be
effectuated at higher discounts.
A further valuation loss of about 320 million Euros relates to the
remaining portfolio on IKBs balance sheet which includes assets carrying a
lower risk profile. This portfolio amounts to about 2.8 billion Euros and
was excluded from the protection of the risk shield.
The current valuation mirrors the extremely negative development of the
capital markets and specifically of the structured portfolio market. It is
also the result of extensive rating downgrades and the drastic increase in
loss forecasts for subprime mortgages in recent weeks.
On the basis of the revaluation the Management Board of IKB has entered
into extensive talks with the Management Board of KfW and others to agree
on a restructuring package for IKB. This package aims to cover the
additional valuation losses. It intends to provide a sufficient increase in
the capital base of the bank to cover valuation losses and restore the
access to capital markets.
According to tonights statements of the Chairman and the vice Chairman of
the Supervisory Board of KfW, the Supervisory Board of KfW has agreed to
further restructuring measures in order to avoid an insolvency of the bank.
KfW and others will immediately resume negotiations to agree on the details
of the planned restructuring concept.
The new valuation of the portfolio investments is based upon a
mark-to-model valuation which has specifically been developed for IKBs
highly complex structured portfolio investments. The underlying procedures
reflect the requirements as laid out in a positioning paper dated 10
December 2007 by the German Institute of Auditors which refers to
accounting and valuation questions related to the subprime crisis.
The Board of Managing Directors
Düsseldorf, 13 February 2008
IR contact: Dr. Jörg Chittka
Phone: +49 (0)211 8221 4349
Fax: +49 (0)211 8221 2511
Email: investor.relations@ikb.de
DGAP 13.02.2008
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Language: English
Issuer: IKB Deutsche Industriebank AG
Wilhelm-Bötzkes-Straße 1
40474 Düsseldorf
Deutschland
Phone: +49 (0)211 8221-4511
Fax: +49 (0)211 8221-2511
E-mail: investor.relations@ikb.de
Internet: www.ikb.de
ISIN: DE0008063306
WKN: 806330
Indices: MDAX
Listed: Regulierter Markt in Berlin, Frankfurt (Prime Standard),
Düsseldorf, Hamburg, München; Freiverkehr in Hannover,
Stuttgart
End of News DGAP News-Service
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DGAP-Adhoc: IKB Deutsche Industriebank AG:IKB revalues its portfolio investments - further restructuring measures agreed
| Source: EQS Group AG