Sweden sells nationalized investment bank Carnegie

(Agencies)
Updated: 2009-02-11 17:17

STOCKHOLM -- Two private equity groups on Wednesday signed a 2.28 billion kronor ($280 million) deal to buy troubled investment bank Carnegie from the Swedish government. Carnegie was nationalized in November after Sweden's financial regulator revoked its banking license due to what it called illegal trading activities.

The Swedish National Debt Office said it had agreed to sell Carnegie and its insurance brokerage Max Matthiesen to Altor Fund III and Bure Equity AB.

The debt office had been looking for buyers since it took control of Carnegie's shares as collateral for an emergency loan extended to the ailing bank.

The government takeover came after the Financial Supervisory Authority said Carnegie had taken exceptional risks by lending large amounts of money to a single customer -- leading to a 1 billion kronor ($128 million) writedown -- and that it broke the law by acting as a guarantor for the same funds it also managed.

The debt office said the total proceeds from the sale of Carnegie and Max Matthiessen would over time fully cover the 2.4 billion kronor loan provided to Carnegie in November.

"This is a good outcome for the Swedish State, the companies involved and the buyers," said Bo Lundgren, the head of the debt office.

Founded in 1803 as a trading company, Carnegie's operations evolved to include brokerage services, equity analysis, equity trading, asset management and advice on corporate acquisitions.