EU Regulators Approve Guarantee Increase for World's Biggest Shipping Financier, For Now
European Commission regulators gave temporary approval on Friday to a total of 10 billion euros in guarantees to public-sector lender HSH Nordbank from its majority shareholders.
Earlier this year HSH asked its owners to increase their guarantees to 10 billion euros ($13.5 billion) from 7 billion.
The world's biggest shipping financier, 85-percent owned by the German regional states of Hamburgand Schleswig-Holstein, has been suffering from the effects of a four-year slump in the shipping industry.
The Commission, which acts as state aid regulator across the 27-member European Union, said in a statement it would make a final decision on the case once it had completed an in-depth investigation.
The 10-billion-euro level restores HSH's guarantees to the level secured at the height of the financial crisis. This was reduced by 3 billion euros last year in expectation of an improvement in business, but that decision was later found to have been too hasty.
If it finds that new state aid has been granted, the Commission could require another round of asset sales as well as bans on acquisitions and dividend bans.
Reporting by Rex Merrifield, editing by Ben Deighton (C) Reuters 2013.