Berlin - Germany's publicly owned HSH Nordbank AG is to become the latest financial house in the country to receive state aid to help it through the current global financial crisis, sources told Deutsche Presse-Agentur dpa Tuesday.

The sources said that two German state governments - Schleswig-Holstein and Hamburg - are to throw HSH a 13 billion-euro (16.6 billion dollar) financial lifeline.

This includes a capital injection of more than 3 billion euros and state-backed guarantees worth more than 10 billion euros.

The Schleswig-Holstein and Hamburg state governments each hold 30 per cent in Hamburg-based HSH, which specializes in financing ship building.

In addition, the US investment group J. C. Flowers & Co, which also a stake in HSH, has indicated it is considering contributing to the capital increase.

In the meantime, HSH has launched a major restructuring, including trimming its workforce, after posting a pre-tax loss of 2.8 billion euros in 2008.

Last week the German Chancellor Angela Merkel's cabinet in Berlin agreed to steps that would be enable the state to take control of troubled banks.

The cabinet approved legislation that will allow Germany's Federal Government to seize control of Hypo Real Estate (HRE), a Munich-based mortgage lender that has been also hit hard by the financial crisis. (dpa)