Germany

The woes of WestLB, which has received $11 billion in taxpayer support since 2009, are symptomatic of a larger problem in the German economy. Many of its biggest banks are still on government life support after making bad lending bets during the bubble years. And with their access to cheap capital long gone, their prospects of becoming profitable again are dubious, the International Herald Tribune reported.

European Union regulators will review competing restructuring plans for WestLB AG, the state- owned lender bailed out during the financial crisis, from the bank’s board and the German government, Bloomberg reported. German Finance Minister Wolfgang Schaeuble proposed the bank transfer its non-saleable assets to a so-called bad bank and sell the rest of its portfolio, EU Competition Commissioner Joaquin Almunia said in an e-mailed statement today. Savings banks would take over the rest of the bank, he said.

Owners of troubled state lender WestLB AG failed to agree on the terms of a European Commission-demanded restructuring plan over the weekend and could keep haggling right up to the plan's submission deadline at midnight Tuesday, several people close to the matter told Dow Jones Monday. WestLB owners have to present a restructuring plan to the commission that outlines how the bank will shrink its balance sheet, while detailing its search for new owners by the end of 2011 and outlining a long-term business model.

Ailing German lender WestLB has received several bids, its official sales agent said, as the bank enters the final stretch to present a restructuring plan to the European Commission, Reuters reported. But sources close to the bank said that although four non-binding bids from strategic players and private equity investors have been tendered, none of the bidders will end up buying the whole lender. Instead, they will only try to pick up parts of it at later stages of the process.

Ailing German lender Hypo Real Estate (HRE) should be wound down, a German expert commission has recommended, two sources familiar with the matter told Reuters on Wednesday. "The experts can see only slim chances that a privatisation of HRE would become a success," said one of the people with knowledge of a report drafted on behalf of the German government by the expert commission. Due to overcapacity in the markets where nationalised mortgage lender and state financier HRE is active, the experts concluded that a sale would not yield higher proceeds than a liquidation, the source added.

Splitting up state-backed German lender WestLB would be the most sensible scenario for the ailing bank, the head of Germany's biggest regional savings banks association said Tuesday, as pressure mounts on WestLB and its shareholders to drastically reduce the bank's size and find new owners by the end of 2011, Dow Jones Daily Bankruptcy Review reported.

Cash-strapped Egoli Tossell Film, the German producer of Golden Globe winner "Carlos," has embarked on financial restructuring to bring in a new shareholder and secure its future, Variety reported. It is in negotiations with an unnamed Frankfurt-based investor, which will take a significant equity stake in the company. As part of this reorganization, ETF filed last week for the German equivalent of Chapter 11. It expects to emerge within three to four months with its new shareholder and a clean balance sheet.

A Munich court ruled on Thursday a squeeze-out of minority shareholders was appropriate in a nationalisation of German mortgage bank Hypo Real Estate, Reuters reported. Presiding judge Helmut Krenek said the move to nationalise the Munich-based property lender had been proportionate and, given the circumstances, was not an act of expropriation. A group of 38 shareholders, including U.S. investor J.C. Flowers, had sought to block the transfer of their shares.

Industrial parts maker NN Inc. said Thursday that it is halting operations at its German manufacturing plant, which has filed for local bankruptcy protection, Bloomberg reported. NN said the global recession and rising cost of operating in Germany forced it to close the Kugelfertigung Eltmann factory, which makes precision steel balls for industrial and aerospace customers. "Unfortunately, we cannot forecast an improvement in the operations of Eltmann to reverse this condition for the foreseeable future," said Chairman and CEO Roderick Baty said in a statement.

European finance ministers debated Monday how to beef up their giant rescue fund for troubled euro-zone countries but ended the first day of a two-day meeting without reaching a firm resolution on how to do it, amid German reluctance to open the doors to more and bigger bailouts, The Wall Street Journal reported. Germany's disinclination to speed ahead dovetails with what European diplomats describe as a momentary air of calm that has descended on the bloc's sovereign debt crisis.