Cash injection
August 26, 2009
A report published on Wednesday by the daily tabloid newspaper Bild cited government officials who estimate HRE needs another seven billion euros in state aid by the end of this year.
The additional bail-out funds would come from the government's financial market stabilization fund, SoFFin, which has been set up to provide liquidity for banks struggling with the financial crisis.
"Developments over the last months made clear that they will, of course, need extra capital," Finance Minister Peer Steinbrueck said.
"In that regard there's nothing scandalous or surprising about it," he added.
HRE has already received more than 100 billion euros in government loans and state guarantees, prompting Berlin to buy up 90 percent of the company's stock.
The government plans on completing its takeover in October with 'squeeze out' maneuver that will force the remaining shareholders to sell their stakes for 1.30 euro per share.
"That price is anything but fair," said Ulrich Hocker, chief of Germany's DSW private investors' association, which plans to challenge the forced sale in court.
HRE shares were worth more than 57 euros in early 2006 and have since lost about 98 percent of their value.
sje/dpa/AFP/AP
Editor: Rick Demarest