IKB share sale postponed

In a statement, the Duesseldorf-based bank said that the subscription would still take place in August as planned but the company would put off receiving the money until the commission decides whether the process was akin to state aid.

"A decision by the EU Commission is expected in September 2008 or, at the latest, by October 2008," the bank said. "It is still planned that the subscription period will take place during the first half of August 2008. There will, however, be a corresponding delay to the time when IKB receives the proceeds from the capital increase."

At the same time, the bank warned that its first-quarter results would be delayed until September and added that it may have valuation losses of some 500 million euros ($793 million) in the quarter.

The news did not sit well with investors, who pushed IKB shares almost 7 percent to 2.62 euros ($4.16) in Frankfurt.

IKB's problems sprang from its Rhineland Funding investment vehicle's apparent inability to cover its funding needs because of exposure to U.S. subprime loans.

IKB lends to small and medium-sized German companies.

The lender's biggest shareholder, Germany's state-owned KfW development bank, and the banking industry have put together rescue packages for IKB totaling more than 8 billion euros ($12.7 billion). They have agreed that IKB should be sold.

IKB did say that the KfW would provide another 1.5 billion euros ($2.4 billion) in liquidity for the bank.

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