The EBRD and IFC have each acquired a 7.28% stake in Romania’s Banc Post by converting debt into shares.
The transaction, combined with a US$10mn capital increase also approved at Banc Post’s recent annual general meeting of shareholders, is intended to strengthen Banc Post’s position as a leading Romanian financial services provider.
Following the capital increase, which will be covered by the shareholders, Banc Post’s capital will increase by US$26mn.
EFG Eurobank Ergasias is the largest shareholder of Banc Post, and will maintain its participation of over 50% 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%.
Banc Post is the fifth largest bank in Romania and the largest with Greek ownership. It employs about 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.
The EBRD and IFC originally each extended US$10mn subordinated, convertible loans to Banc Post in 1998 as part of an effort to increase the bank’s capital and prepare it for privatisation, which eventually occurred in 2002. Under today’s transaction, each is converting US$8mn of the debt into shares.