The European Commission approved on Friday a resolution plan for the Dexia group submitted by Belgium, France and Luxembourg, which includes the sale of Dexia Municipal Agency (Dexia MA) to a new credit institution of which France will be the main shareholder.

The French state will hold 75% of the newly formed entity, and state-owned Caisse des Dépôts et Consignations and La Banque Postale will have stakes of 20% and 5%, respectively, with the possibility of the latter rising to 33% depending on the increase of new assets financed by Dexia MA.

The new plan increases the share of France in the ownership of Dexia MA – which had previously been planned at 68.3% – and confirms the removal of Dexia Crédit Local from Dexia MA’s future shareholders, as anticipated in November 2012.

According to the new orderly resolution plan, “the [French] state will play the role of reference shareholder of this new structure,” said the European Commission.

“Thus the future of Dexia MA will be in an activity entirely dedicated to financing the French local public sector, within a mechanism sustainably held and controlled by the State,” it added.

As part of the deal, Dexia MA’s balance sheet will be transferred to the new institution. The European Commission noted that Dexia MA’s assets amounted at Eu94.3bn at 30 September 2012, of which Eu72.1bn were cover pool assets. Non-French assets, which represent 30.8% of total assets, will also be transferred to the new French-owned entity and run off.

Beside the sale of Dexia MA, the main elements of the orderly resolution plan are a Eu5.5bn capital increase for Dexia and the establishment of a tripartite funding guarantee backed by Belgium 51.41%, France 45.59%, and Luxembourg, 3%.