Dexia board of directors due to meet

The board of directors of troubled Dexia will meet on Sunday in Brussels, officials said as France and Brussels intensified talks on a deal to dismantle the cross-border bank. The board will meet at 1500 (1300 GMT), said a spokesman for the bank. Ahead of the meeting, French and Belgian prime ministers, Francois Fillon and Yves Leterme, will hold a lunch-time meeting in Brussels to finalise a deal to dismantle the bank. Dexia, which had to be rescued in 2008 in the global financial crisis, is the first European bank to be dragged down by the eurozone debt crisis. France and Belgium, Dexia shareholders after the 2008 bailout, are seeking agreement on the sale price of Dexia shares, including in its Belgian retail banking arm, Belgian media reported. They also need to agree on the guarantees needed to back up a so-called "bad bank" that will remain after Dexia's dismantling to hold high-risk assets. The two countries, who were forced last week to step in and rescue Dexia, are in disagreement over the price for Dexia Bank Belgium, which the Belgian state now wants to buy, according to media reports. Belgium is seeking to pay the lowest possible price, a problem for French shareholders who want a lucrative deal and favour a transfer to another bank, said the Belgian economic daily l'Echo. It estimated the price for the bank between 3 billion and 7.5 billion euros ($4 billion to $10 billion). Several banks, including Deutsche Bank, Rabobank, Credit Mutuel and BBVA, have shown interest in Dexia Bank Belgium, said the Belgian press. Another sticking point: what share each government will cover in guarantees for the bad bank's portfolio. France favours a division of 60/40 or even 65/35 with Belgium taking the bigger bite, said l'Echo. Paris fears that taking a bigger share may see it lose the top AAA credit rating that allows it to borrow cheaply on the international financial markets. Credit ratings agency Moody's warned Friday that Belgium could be downgraded over its support for Dexia. Dexia had relied heavily on money market funding for its operations, but such financing has become scarcer and more expensive for eurozone banks due to concerns over their sovereign debt exposure. Also present at the meeting between the prime ministers on Sunday will be a Luxembourg delegation to discuss the negotiations to sell Dexia's Luxembourg operations, Dexia BIL. Those talks are reportedly at an advanced stage with an unnamed international investor.