The EBRD and IFC today each acquired a 7.28 per cent stake in Romania’s Banc Post by converting debt into shares.
The transaction, combined with a $10 million capital increase approved at Banc Post’s annual general meeting of shareholders today, is intended to strengthen Banc Post’s financial position. Following the capital increase, covered by the shareholders, Banc Post’s capital will increase by $26 million.
EFG Eurobank Ergasias is the largest shareholder of Banc Post, and will maintain its participation of over 50 percent in the share capital. EFG Eurobank has also signed a put and call arrangement with the EBRD and IFC with respect to their share in Banc Post. EFG Eurobank also holds an option to acquire shares currently owned by GE Capital that amount to 7.48 per cent.
Banc Post is the fifth-largest bank in Romania. It employs approximately 3,500 people. In 2004 the bank has shown impressive growth, with both lending and deposit-taking increasing faster than that of the Romanian banking market.
The bank runs a network of 164 branches throughout Romania, covering all areas of banking with emphasis on retail and large and medium enterprises, following operational systems and customer service standards similar to those of Greece. It is worth noting that in 2004 Banc Post was awarded by ‘The Banker’, member of the Financial Times publishing group, as ‘Best Bank in Romania’.
The EBRD and IFC originally each extended $10 million subordinated, convertible loans to Banc Post in 1998 as part of an effort to increase the bank’s capital and prepare it for privatization, which eventually occurred in 2002. Under today’s transaction, each is converting $8 million of the debt into shares.