SIFs still have a say

If the four Financial Investment Companies (SIFs) holding stakes in Banca Agricola (BA) purchase shares during the bank’s capital increase, the consortium made up of Raiffeisenbank and the Romanian-American Fund (FRAI), which is likely to take over the bank, will acquire a 61% stake, instead of 98%.

BA General Assembly of Shareholders (AGA) is to discuss the bank’s share capital increase by 6,445.004 billion lei on Friday, when SIFs’ decision regarding the maintenance of their investments in the bank is eagerly expected.

“The contract signed on Thursday clearly stipulates that the amount of 15 million dollars will be paid for a 98% stake in BA. If the SIFs use their pre-emptive rights, the contract will stipulate that the stake to be sold will stand for only 61%. The price will accordingly go down to about 9 million dollars,” authorised sources stated.

BA privatisation contract signed last Thursday will be ratified next week at Victoria Palace provided both the Romanian party and representatives of the consortium comply with several requirements, among which one concerning the opening of a 37 million-dollar escrow deposit in a Romanian bank. Another stipulation regards the filling in of certain appendices regarding BA exact situation.

According to the Privatisation Authority minister Ovidiu Musetescu, the privatisation of the second-largest bank in Romania may be deemed as a success, though the Privatisation Authority negotiated from the position of a person “having lung cancer, a right wooden hand and a steel leg.” Musetescu feels that one couldn’t possibly get a better price under such circumstances.

“This transaction allows us to maintain the bank’s operations, while its liquidation, as an alternative to privatisation, would have cost 275 million dollars,” Musetescu added.

According to the Privatisation minister, the Romanian State pledged to cover the bank’s losses registered up to the takeover, within 25 days. “The required amount will not exceed 733 billion lei,” Musetescu specified.

When he commented on the bank’s losses, Musetescu said that “it would be normal that these should be paid by those who caused them, but, unfortunately, the state has to do it.” BA will dismiss 10% of its staff after it is taken over by the FRAI and Raiffeisen Zentralbank consortium.