NordLB says likely to finance VW shares for state

[Paul_Royal@idx.com]

Thursday November 20, 7:06 am Eastern Time

HANOVER, Germany, Nov 20 (Reuters) - Germany's Norddeutsche Landesbank
(NordLB) said on Thursday that it would probably
 help finance the German state of Lower Saxony's wish to buy shares in
carmaker Volkswagen AG's (OTC BB:VLKAY - news; VOWG.F)
postponed share offering.

``It would not be a surprise if that were to take place,'' NordLB spokesman
 Sonning Bredemeier told Reuters when asked if NordLB
 would help finance Lower Saxony's bid to buy shares.

Bredemeier said intensive talks were being held with the state about
possible financing measures to buy shares in the VW offering
of six million shares, which was put on hold indefinitely after VW stock
fell below the issue price due to market turbulence.

Lower Saxony, home to Volkswagen and the carmaker's main shareholder,
currently has a 20 percent stake in the company. Lower
 Saxony premier Gerhard Schroeder, a member of VW's supervisory board, has
said the stake must not be diluted.

If Lower Saxony does not participate in the offering, the second-largest in
 German history, then the state's holdings in VW would fall to
16 percent.

Lower Saxony must buy 1.2 million of the offered shares to keep its VW
stake at 20 percent.

The state said in October -- a few days before the offering was put on hold
 -- that it would buy more shares but may not use funds from
the government budget.

NordLB has long been touted as a potential financing source for VW since
the bank directly holds 20,000 VW shares and holds another
5.38 million shares through the Hannoverische Beteiligungs Gesellschaft.