STOCKHOLM: The Swedish state has sold its remaining seven per cent stake in Nordea, the region’s biggest bank, giving the center-right coalition government another 21.6 billion crowns ($3.4bn) to deploy in the national budget ahead of next year’s election, Reuters reported on Wednesday.
The latest sale was made on the first day the state was allowed to further reduce its stake after selling 260 million Nordea shares for $3bn in June and takes total proceeds from Nordea sales during the government’s years in office to $9.4bn.
The government priced the latest sale of 284.2 million shares at 76 crowns per share, a four per cent discount to Nordea’s closing price of 79.20 crowns on Tuesday. Price guidance had been set at 75.50 to 76 crowns, two sources familiar with the matter told Reuters, while the discount was smaller than the 4.8 percent it offered in its last sale.
Final exits by a big shareholder, often known as clean-up trades, can usually be done at a tighter discount than previous sales as they remove the overhang effect on the stock. One of the sources said the offering was more than two times covered by demand.
Nordea’s share price was down 2.7 per cent at 77.10 crowns by 1021 GMT, when shares in rival Handelsbanken were down 1.5 per cent at 280.90 crowns and Swedbank was 2.6 per cent lower at 151.50 crowns.
The coalition government, which faces general elections next year and is trailing badly in polls, plans to use the proceeds to reduce state debt, already one of the lowest in Europe at about 30 per cent of economic output.
It has long prioritised a full divestment of the state holding in Nordea, a legacy of the country’s banking crisis in the 1990s, saying it is the role of the state to regulate banks not own them.
“In some sense, one could say today we put an end to the banking crisis which ravaged the 80s and 90s,” Minister of Financial Markets, Peter Norman, said.
The sale also gives the government extra cash as it heads into a fierce battle for re-election next year.
Plans to offload other assets such as its stake in telecoms operator TeliaSonera have been blocked by political opposition.
The minority government recently announced some $2.3bn in income tax cuts as it strives to boost economic growth and secure a third term in office.
Last week, the British government sold a six per cent stake in banking group Lloyds for £3.2bn ($5bn) ahead of a 2015 general election, recouping taxpayer cash five years after a bailout of both Lloyds and rival Royal Bank of Scotland.
“It is very rare you have two consecutive jumbo placements in banks. There is a lot of demand out there for banks and investors are looking to rebuild positions,” one of the sources familiar with the matter said.
Sweden is one of Europe’s strongest economies, but unemployment has remained stubbornly high while voters are expressing greater concern over the nation’s fast-widening income divide and skepticism over further changes to their beloved welfare system.
Privatisation has been a hot potato, with Swedes growing suspicious of more welfare cuts following scandals over private care homes for the elderly and for-profit schools.