The German states of Hamburg and Schleswig-Holstein have launched the sale process for HSH Nordbank AG.

The states, which own the shipping-focused bank through hsh finanzfonds AöR and HSH Beteiligungs Management GmbH, intend to sell up to 94.9% for cash, according to a Jan. 23 statement from Citigroup, the financial adviser in the sale process. This could in certain circumstances be increased to 100%.

The sale is in accordance with EU state aid proceedings. In 2016, the European Commission approved the removal of bad loans from the bank with state guarantees. The states are supposed to complete the bank's privatization by February 2018.

HSH Nordbank has recently incurred large losses related to the struggling shipping industry.