Would you buy this bank for a dollar?

According to a report from Reuters, a consortium including U.S. investor Excellere Capital Group is seeking to acquire the 'bad bank' formed as part of the process of disposing of the assets of the failed Austrian bank, Hypo Alpe Adria.

Would you buy this bank for a dollar?

The Austrian finance ministry claimed it had not yet received an offer from the group, although Excellere informed reporters that they had submitted a bid – consisting of a symbolic one euro – via email at the end of 2014.

The government will decide early this year about the future of the specialized company, known as Heta Asset Resolution, which was set up to handle toxic assets and bad debts belonging to Hypo after the bank was nationalized in 2009.

According to Reuters, Excellere Capital describes itself on its website as an investment banking firm with "a direct investment capability in addition to the capacity possessed by its client base".

Hypo Alpe Adria announced 30 October 2014 that it would sell its Balkan subsidiaries to major US investment fund Advent International. A minority share will go to the European Bank for Reconstruction and Development (EBRD), the development bank for Central and Eastern Europe.

Headquartered in Klagenfurt, Hypo had overexpanded in Balkan countries, where it had financed high-risk credits. Following the decision on the sale, the remaining part of the bank will be wound down as a state-owned bad bank with assets worth 17 billion euros (22 billion dollars).

The price for the sale of the Balkan operations was not disclosed. The deal is pending approval by Advent's and EBRD's boards.

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Agreement reached on failed bank bailout

Austrian Finance Minister Hans Joerg Schelling said Wednesday an agreement in principle had been reached with the stricken Hypo bank's creditors that had threatened to bankrupt the state of Carinthia.

Agreement reached on failed bank bailout
Hypo Group Alpe Adria headquarters. Photo: HGAA Website

“We're drawing a definitive line under the Hypo affair” the minister told journalists, referring to state bank Hypo Group Alpe Adria (HGAA), which has saddled Carinthia with 11 billion euros in debt.

The deal will see creditors receive 75 percent of the face value of the HGAA bonds they own. They will be offered to buy that value of Austrian government bonds at 75 percent face value.

The proposal is better than the one creditors rejected in March as the Austrian government bonds mature in 13 instead of 18 years.

Schelling said an agreement in principle has been signed with a portion of creditors and compensation could be launched in September.

The creditors include Germany's Commerzbank and a Dexia unit, according to Bloomberg.

The saga is a legacy of late Austrian far-right political Joerg Haider, formerly premier of Carinthia, who died in 2008.

Under Haider, HGAA expanded into the Balkans as well as Italy and Germany via acquisitions and risky investments, expanding its balance sheet fourfold to some 40 billion euros.

Bavaria's state lender BayernLB bought a majority stake in 2007 in HGAA but two years later, as the global financial crisis raged, the bank came close to collapse and Austria nationalised it.

After a long and bitter dispute, Austria finally agreed last November to pay Bavaria 1.23 billion euros to put an end to the feud.