BRUSSELS (AP) — Troubled Franco-Belgian bank Dexia Group said Tuesday it has sold its Luxembourg subsidiary to Qatari investment fund Precision Capital and the state of Luxembourg for euro730 million ($950 million).
Precision, which backed by the Qatari royal family, will hold a 90 percent stake in Dexia Banque Internationale a Luxembourg, while the state of Luxembourg is buying the remaining 10 percent, Dexia said in a statement.
Dexia was split up and partially nationalized this fall after other banks, worried by its huge reliance on short-term funding and large exposure to struggling countries like Italy and Greece, stopped lending to it.
The Belgian state took over Dexia's Belgian retail arm, while other subsidiaries are in the process of being sold.
Tuesday's deal is Precision Capital's second move into the Luxembourg banking sector.
In October, Precision agreed to buy Luxembourg-basd KBL European Private Bankers, the private banking division of Belgium's KBC Group, for just over euro1 billion.
Precision is backed by Qatar's ruling Al Thani family. Sheik Hamad bin Khalifa Al Thani, the emir of Qatar, holds near absolute power in the small Persian Gulf country.
Dexia's Luxembourg arm is not the only part of the bank to attract attention from Qatari state-linked investors.
Qatar National Bank said in mid-October it was launching potential takeover talks with DenizBank, Dexia's Turkish division. Qatar's sovereign wealth fund, the Qatar Investment Authority, controls QNB through a 50 percent stake.
OPEC member Qatar sits atop the world's third largest natural gas reserves, and is the world's largest supplier of liquefied natural gas. Its European holdings include investments in Barclays PLC, Credit Suisse Group, Volkswagen AG, and the London Stock Exchange Group PLC.
Adam Schreck in Dubai contributed to this story.