Commerz-bank on Wednesday presented a plan to repay the majority of state aid by June. The plan is to pay back 14.3 billion euros ($20.3 billion) of the 16.2 billion euros in so-called silent participation, a form of non-voting capital injected by the German government at the height of the financial crisis.
A rights issue will take place between May and June, with a total of 8.25 billion euros to be raised on capital markets, Germany's second biggest lender said. In addition, silent participations worth 2.75 billion euros are to be converted into Commerzbank shares or contributed as part of a rights issue. "The announcement doesn't come as a surprise but considering that there is now a concrete time frame and things are really getting moving, the share should react well today," trader at Frankfurt's Alpha Trading brokerage said. "The fact that the AGM is being pulled forward also shows that there is a certain urgency which will likely encourage investors," he added.
Earlier this month, Reuters said Commerzbank is putting the finishing touches on a "big bang" plan for repaying state bailout money. From April onwards Commerzbank plans to place conditional mandatory exchangeable notes, which will be converted into shares, Commerzbank said.
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