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Lyonnais trading suspended
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June 14, 1999: 8:00 a.m. ET
Privatizing French bank's investment certificates halted ahead of announcement
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LONDON (CNNfn) - Investment certificates of privatizing French bank Crédit Lyonnais were suspended on the Paris bourse Monday, pending an announcement relating to an unspecified financial transaction
Exchange officials said trading was unlikely to resume Monday.
The suspension comes as Lyonnais braces for a long-anticipated stock market debut on July 8 - although roughly 10 percent of Lyonnais stock is already in the public domain in the form of the investment certificates, which carry no voting privileges. The investment certificates will be exchanged for regular shares in the forthcoming privatization.
An additional 10 percent is held by the state.
Investors are banking on the market launch to end a decade-long riches-to-rags ordeal that has toppled Lyonnais from the summit of French banking, placing its humbled directors at the mercy of a state-led bailout.
On Saturday, French Finance Minister Dominque Strauss-Kahn announced an indicative share price of 22.5 to 26.2 euros per share ($23.60 to $27.50) for a block of stock - estimated at around 42 percent of the company -- that Lyonnais intends to float on the open market. A final price will be fixed on June 28.
The pricing range was roughly on par with earlier estimates of a 22 to 28 euro range. The public sale values Crédit Lyonnais at 41.2 to 48 billion francs ($6.59 to $7.67 billion).
A so-called "blocking minority" of 33 percent of the Lyonnais share capital is being divvied up among a group of seven core shareholders, who will each hold 1 to 10 percent stakes in Lyonnais.
The largest single shareholder in the core group, French mutual company Crédit Agricole, with a 10 percent stake, is expected to play a key role helping to nurse Lyonnais back to health. The principle partners are also likely to provide a buffer between Lyonnais and potential buyout companies.
The remaining core shareholders are: AGF, the French affiliate of Germany's Allianz, with six percent; France's leading insurer, Axa, with 5.5 percent; Commerzbank of Germany, with 4 percent; Banca Bilbao Vizcaya, with 3.75 percent; Banca Intesa, with 2.75 percent; and Crédit Commerciale de France, which will hold one percent.
At its zenith in the early 1990s, Crédit Lyonnais boasted assets of around 2 trillion francs, placing it on the top rung of France's banking pantheon. In 1994, the bank recorded a loss of 12.1 billion francs, from which it recovered the following year.
But recovery came at the cost of a humiliating state-sponsored rescue plan, under which Lyonnais was obliged to privatize and hand over a portion of its profits to the government every year through 2014.
-- from staff and wire reports
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Crédit Lyonnais
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