FRANKFURT, April 25 (Reuters) - HSH Nordbank, which is in the midst of a sale to buyout groups Cerberus and J.C. Flowers, will post a pretax loss of more than 400 million euros ($487 million) in 2017, after a 2016 profit of 121 million euros, people close to the matter said.
The main reason for the loss was the sale of a 3.5 billion euro non-performing ship loan portfolio at a discount of about a third to the same investors, the people said on Wednesday.
HSH, which is expected to publish its 2017 figures on Thursday, declined to comment.
The bank's public owners are aiming to close the privatisation, which still needs approval from the European Central Bank and the European Commission, in summer.
Hamburg and Schleswig-Holstein bailed out HSH with 3 billion euros in equity and a 10 billion-euro guarantee -- which the bank is drawing fully -- after risky investments turned sour and the shipping industry witnessed its worst slump on record.
HSH became the world's largest lender to the shipping industry in the 2000s, after taking on large amounts of debt, in anticipation of the expiry of a rule that allowed for generous refinancing of German state-backed banks.
The states have said that total losses they incurred in their HSH investment would range from 10.8 billion to a maximum of 14 billion euros. ($1 = 0.8214 euros) (Reporting by Klaus Lauer Writing by Arno Schuetze Editing by Alexander Smith)