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Sweden raises 19 billion kronor from Nordea sale
Sweden's Financial Markets Minister Peter Norman explains Nordea share sale

Sweden raises 19 billion kronor from Nordea sale

Published: 04 Feb 2011 13:19 GMT+01:00
Updated: 04 Feb 2011 13:19 GMT+01:00

"The earnings from the sale amounting to 19 billion kronor will be used to reduce the public deficit and thereby strengthen the Swedish economy," Financial Markets Minister Peter Norman said in a statement.

He added the amount represented about 2.0 percent of Sweden's public debt.

The centre-right coalition government announced late Thursday it would sell up to 255 million shares in Nordea, the largest bank in Sweden and the Nordic region with some 11 million clients.

Friday's sale of 255 million shares at 74.50 kronor a piece brought down Sweden's share in the company to 13.5 percent from 19.8 percent.

The announcement was in line with the government's stated plan to gradually sell-off parts or all of several state-held companies.

The state holdings in Nordea stem from Sweden's deep banking crisis in the early 1990s, when the initially fully state-owned bank was created through the merger of the viable parts of several smaller struggling banks.

Today, Nordea's largest shareholder is Finnish insurance company Sampo with some 20 percent of the stock.

"The state-owned businesses are important for Sweden and the state shall continue to own companies that have a particular importance to society. In other cases, it is the state's task to set the framework and rules for the business sector -- not to own and run companies," Norman said.

When Swedish Prime Minister Fredrik Reinfeldt's coalition first came to power in 2006, it received parliamentary backing for its plans to sell-off state-owned companies.

Before winning re-election last September, the government reiterated its intention to let go of some or all of TeliaSonera, Nordea and mortgage lender SBAB.

It has said energy company Vattenfall and its share of Scandinavian airline SAS could also soon go on the block.

The far-right and left wing opposition parties have said they plan to block some of the minority government's sell-off plans, but Nordea was not one of the companies they wanted the state to hold on to.

Sweden has already sold Absolut Vodka maker Vin & Sprit, a chunk of telecoms giant TeliaSonera, its share in the Nordic and Baltic stock exchange operator OMX and part of the postal service, among others.

AFP/The Local (news@thelocal.se)

Your comments about this article

13:54 February 4, 2011 by svenne101
it is 19 billion not 19 million in the first line of the article
14:02 February 4, 2011 by rba
Good idea, the banks will probably sink again one of these days, and then worst case the Swedish government can buy back the same shares at a symbolic price.
14:04 February 4, 2011 by Nemesis
All of which will be frittered away instead of invested for a rainy day.
15:39 February 4, 2011 by rba
What do you mean Nemesis? I don't think Sweden has a very high debt or deficit.
16:30 February 4, 2011 by UScitizen
@rba

Well, it's nowhere near the US debt but if 19 billion is 2 percent, the debt is pretty high....950 billion!
16:32 February 4, 2011 by krattan
A bit worrying is that Vin & Sprit was sold of at exactly the right time. In 2008, before the financial crisis. Apparently they have to wait 90 days before selling more stock in Nordea. Perhaps the state is expecting a second financial crisis some time after that.
16:32 February 4, 2011 by Great Scott
I make you right Nemesis, but I see this being used to give the rich further tax cuts.

One thing is for sure, the Swedish public will see none of it.
16:35 February 4, 2011 by tuerd1982
Seems like Sweden going to sell everything they own.
17:04 February 4, 2011 by adigunbabatunde@yahoo.com
^^^^but not systems bolaget
17:21 February 4, 2011 by RoyceD
how is selling off a state owned enterprise profitable? Yes you get "money" for it but what you loose is much more valuable.
18:06 February 4, 2011 by Nemesis
@ rba

Gross external debt of Sweden on 30 June 2009

$1,004,742,610,565 USD

or

6,521,699,000,000.00 SEK

That does not look like the debt of a healthy economy.

Sweden is selling of everything as fast as it can. That can only go on for so long.
18:39 February 4, 2011 by xplaban
I think this sale is a big opportunity to reduce the Sweden's public debt
18:49 February 4, 2011 by Alohart
@Nemesis

Riksgälden states that as of 31 December 2010, the central government debt was 1,151 billion SEK, or about 1/6 of what you stated for 30 June 2009. Might the amount that you stated in USD actually have been in SEK?

The Swedish central government debt has been reduced from 90% of GDP in 1995 to only 36% of GDP at the end of 2010. That's 122,000 SEK/Swede. Compare that to U.S. government debt which is 96% of GDP or 290,000 SEK/U.S. citizen. So it seems that Sweden's economy is much healthier than that of the U.S. (which might not be saying much).
20:02 February 4, 2011 by Nemesis
@ Alohart,

Using the US as a comparative is not a good idea. Most of the third world is better economic shape than the US, let alone Sweden.
20:31 February 4, 2011 by RobinHood
Why does the Swedish government need shares in a bank?

Banks do banky things, and governments govern. Sell the other 13.5% and bring down Sweden's national debt even more.
22:47 February 4, 2011 by mikmak
The govt owned shares in Nordea from the bail-out in the 90's, they have never had an interest in running banks...
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