The supervisory board of German state lender KfW has agreed to a sale of lender IKB, Germany's most prominent subprime casualty, and sources say that US private equity group Lone Star has been chosen.
"We are in agreement," Finance Minister Peer Steinbrueck, deputy chairman of KfW's supervisory board, told reporters.
Mr Steinbrueck was speaking yesterday following a meeting in Berlin of senior members of the board of KfW, IKB's biggest shareholder.
Financial sources said that Lone Star was the chosen buyer. Lone Star, KfW and RHJ International , which had been reported as a potential buyer, all declined to comment.
KfW supervisory board Chairman Michael Glos, who is also Germany's economy minister, told reporters in Berlin: "Basically everything is within the target figures, we are high and dry."
"The supervisory board unanimously supported the proposal of the KfW management," he said.
Mr Steinbrueck said a news conference on the sale agreement would take place in Frankfurt today.
A sale would close a painful chapter in German banking history. IKB has been rescued three times at a cost of more than €8 billion, mostly with the help of government-owned KfW.
Once a little-known lender to small German companies, IKB shot to fame last year as Germany's first casualty of the subprime mortgage crisis in the United States, when billions of euros of its investments turned sour.
The spiraling cost of the rescue and the use of taxpayer money to bail out the bank have stoked political tensions as the government tried to sell the lender.