Troubled Dexia has entered into exclusive negotiations to sell off its Luxembourg affiliate to a group of international investors and the country's government.
The State of Luxembourg will participate for the disposal of Dexia Banque Internationale à Luxembourg.
Belgian and French finance ministers plan to split off its riskiest assets into a "bad bank", which will manage the rundown of the lender's problem assets, including billions of euros of loans to local governments in Greece and Italy.
The move would separate this business from its French local government lending operations.
A statement says the board of directors of the Dexia group will take a decision on a potential offer by the end of the exclusive period.
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