Allgemeine HypothekenBank Rheinboden AG, the Frankfurt mortgage bank now majority owned by the Dallas investment firm Lone Star Funds, expects to report a 2005 net loss of $1.3 billion to $1.5 billion.
AHBR told the Frankfurt Stock Exchange on Monday that Beteiligungsgesellschaft der Gewerkschaften AG had sold a 87.9% stake in the mortgage bank to Lone Star. BGAG owns the remaining stake, which Lone Star can buy at any time, AHBR said.
The deal, announced Dec. 8, will boost AHBR's equity capital "by an appropriate amount with the beginning of fiscal 2006," the mortgage bank said. It plans to publish a new business model this month.
Financial Times Deutschland, which cited unidentified people in the financial markets, reported last month that BGAG agreed to give Lone Star about $711 million as a "financial cushion" to cover risks in the transaction.
