RIJEKA, April 29 (Hina) - A contract on purchase and entry of shares was signed on Monday giving Austria's Erste Bank ownership over 85.02 percent of shares in Rijecka Bank.
RIJEKA, April 29 (Hina) - A contract on purchase and entry of shares
was signed on Monday giving Austria's Erste Bank ownership over
85.02 percent of shares in Rijecka Bank. #L#
The EUR155 million contract was signed in the northern Adriatic
port of Rijeka by Reinhardt Ortner, a member of the Erste Bank
management board, and Marijan Marinko Filipovic, president of the
DAB state agency for bank rehabilitation and the insurance of
savings. The contract envisages EUR55 million for shares and 100
million for recapitalisation.
Erste Bank will deposit EUR28 million within a few days, while the
other 27 million will be deposited on a separate account until the
completion of due diligence, the complete review of Rijecka Bank's
business. The due diligence will be carried out by Erste Bank to
ensure possible Rijecka Bank losses which may have gone unnoticed.
For recapitalisation, Erste Bank will earmark EUR80 million in cash
and 20 million in long-term loans for a minimum period of 15 years.
Even though a US$98 million loss has been established in Rijecka
Bank, Erste's management board has agreed to not seek the
reimbursement of the deposited EUR27 million if the loss were to
reach US$101 million.
After purchasing the majority interest in Rijecka Bank, the Erste
group holds more than ten percent of Croatia's banking sector, said
Ortner. He added that despite the losses, Rijecka was a strong and
stable bank which represented a safe springboard for Erste Bank's
expansion to central and southern Europe, where Erste wishes to
acquire 25 percent of the market.
Erste is the best source for Rijecka Bank and the stabilisation of
the entire Croatian banking sector, said Filipovic. Asked how
citizens would benefit from the purchase, he said citizens' savings
were safe, that all 1,000 employees would keep their jobs, and that
interest rate would further drop.
(hina) ha sb