Today, the Austrian Financial Market Authority (FMA) in its function as the resolution authority pursuant to the Bank Recovery and Resolution Act (BaSAG – Bundesgesetz über die Sanierung und Abwicklung von Banken) has issued the key features for the further steps for the resolution of HETA ASSET RESOLUTION AG. The most significant measures are:
• a 100% bail-in for all subordinated liabilities,
• a 53.98% bail-in, resulting in a 46.02% quota, for all eligible preferential liabilities,
• the cancellation of all interest payments from 01.03.2015, when HETA was placed into resolution pursuant to BaSAG,
• as well as a harmonisation of the maturities of all eligible liabilities to 31.12.2023.
According to the current resolution plan for HETA, the wind-down process should be concluded by 2020, although the repayment of all claims as well as the legally binding conclusion of all currently outstanding legal disputes will realistically only be concluded by the end of 2023. Only at that point will it be possible to finally distribute the assets and to liquidate the company.
“While the application of the new European recovery and resolution framework for banks is unchartered territory both in legal and practical terms, we are on target with the resolution of HETA and are also making satisfactory progress in relation to the realisation of its assets”, the FMA’s Executive Board, Helmut Ettl and Klaus Kumpfmüller commented: “The measures that have been prescribed under BaSAG form the basic structure for an orderly resolution, and fully satisfy the aims of the European resolution regime – namely to guarantee financial market stability, to protect taxpayers and to bail-in creditors. Moreover, this package of measures also ensures the equal treatment of creditors. Orderly resolution is more advantageous than insolvency proceedings.”
This resolution plan builds upon an opinion by an external auditing company appointed by the FMA, which has valued and estimated, based on the resolution planning for HETA, using very conservative assumptions by how much the claims of the creditors will exceed the assets of HETA. Following the deduction of the outlay in relation to resolution, the quota will stand at 46.02%. In addition, an opinion estimated a distribution quota of 34.8% in the best-case scenario in the event of insolvency proceedings. Resolution under BaSAG is therefore clearly more advantageous for all concerned.
Although the maturity of all eligible liabilities was set as 31.12.2023 at the latest, the FMA retains the option to make partial pay-outs on a voluntary basis at an earlier date.
Shortly before the emergency administrative decision of 10.4.2016, in which the resolution measures under BaSAG were issued, the FMA published the administrative decision in relation to the challenge procedure in relation to the decision of 01.03.2015, in which HETA was placed into resolution under BaSAG and a debt moratorium prescribed until 31.5.2016. In the administrative decision in relation to the challenge procedure (Vorstellungsbescheid), the FMA recognises and examines all the challenges submitted during the ordinary administrative proceedings, with the result that the content of the emergency administrative decision (Mandatsbescheid) remains fully binding. The creditors may submit complaints in relation to the administrative decision about the challenge procedure to the Federal Administrative Court (Bundesverwaltungsgericht).
Challenges may be submitted to the FMA against the emergency administrative decision of 10.4.2016, which sets out the significant resolution actions under BaSAG, within three months. If applicable, the FMA will initiate ordinary administrative proceedings, will recognise and examine the submitted challenges and will then issue an administrative decision in relation to the challenge procedure.
The text of the emergency administrative decision (Mandatsbescheid) can be downloaded from the FMA website at: https://www.fma.gv.at/en/resolution-of-heta-asset-resolution-ag/
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)676/882 49 516