GLOBAL – Negotiations between Hong Kong-based private equity firm GCS Capital and Belgo-Franco banking group Dexia over the sale of Dexia Asset Management (DAM) have been particularly long and "full of requests", according to a Dexia spokeswoman, who confirmed negotiations between the two had ended.

Contacted by IPE over rumours that the sale of DAM to GCS was in jeopardy, Dexia's spokeswoman confirmed that the bank had ended talks on 15 July, but stressed that the procedure was still ongoing.

"The deadline for negotiations was originally set on 30 June, but the procedure has been extended to the end of this month," she said.

"Until that date, the buyer has the chance to fulfil its contractual obligations and close the transaction."

The spokeswoman went on to say that the procedure, which was launched on 12 December last year, took longer than expected due to several requests and negotiations.

"We do not have any problem with DAM, which is a well managed and well-functioning entity," she added.

The spokeswoman finally said that if the procedure with GCS were to fail, Dexia would then immediately enter into a new procedure to find a potential buyer.

A spokesman for GCS declined to comment and stressed that the procedure was still ongoing.

When talks with Dexia started in December last year, Huan Guocang, chief executive at GCS, said DAM presented a "rare opportunity" to acquire a "well-capitalised, standalone asset management business with the potential to transition into a global franchise".

In 2011, three EU member states – Belgium, France and Luxembourg – agreed to bailout the bank for the second time.

In 2008, these governments stepped in with €150bn of guarantees to consolidate Dexia after it ran into financing difficulties.

The three governments then provided an additional €90bn to Dexia in 2011, with 60.5% of that amount being provided by Belgium, 36.5% by France and 3% by Luxembourg.

Shortly after the bailout, Dexia began the lengthy process of offloading its constituent businesses, as agreed with the European Commission.

The sale of DAM is part of that process.