BELGRADE (Serbia), December 7 (SeeNews) – The European Bank for Reconstruction and Development said it is considering an investment of 4.6 billion dinars ($71 million/48 million euro) jointly with other international lenders in a 11.4 billion dinar capital increase of Serbia’s Komercijalna Banka.
The investment will be made jointly with the International Finance Corporation (IFC), German development bank DEG and Sweden’s Swedfund, the EBRD said in a statement on its website.
“The capital increase will be in form of a new class of non-voting preference shares, qualifying as tier 1 capital, that are convertible upon notice by the investor from 1 January 2013 for a period of 4.5 years into newly issued ordinary shares,” the EBRD said.
The investment aims to equip Komercijalna Banka with a capital buffer in times of crisis, to help the bank increase the capital in its Montenegrin and Bosnian units and to allow it maintain its loan portfolio and lending operations to the real economy, the EBRD added.
Komercijalna Banka ranks as Serbia’s second largest bank by assets, which totalled 195 billion dinars at the end of September.
The Serbian government is the biggest single shareholder in Komercijalna Banka, holding 42.6% of the bank's ordinary shares. The EBRD follows with a 25% stake, while remainder belongs to smaller shareholders.
In October, Serbian Economy Minister Mladjan Dinkic said the government will sign with the EBRD and the IFC, the World Bank's private sector arm, a contract on the capital hike of Komercijalna Banka by the year's end. Under the deal, Serbia would have three years to pay in a corresponding capital increase in order to remain the biggest single shareholder in the bank. Dinkic also said at the time that Serbia would have to pay around 90 million euro if it were to contribute to the capital hike immediately.
“In addition, the investment will also facilitate the privatisation of the bank more directly through a comprehensive set of privatisation milestones which have been agreed with the Serbian government," the EBRD said.
Komercijalna Banka is a blue-chip heavyweight on the Belgrade bourse. It led advancers on Monday, soaring 4.73% to 31,500 dinars in a volume of just one share.
(1 euro = 96.2 dinars)
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