IFC poised to take over 3.5% in Banca Transilvania by converting bonds into shares

IFC (International Finance Corporation), the World Bank's investment arm, could become one of the biggest shareholders of Banca Transilvania (TLV), with about 3.52% in its capital, if it decides to convert the 20 million-dollar bonds it has held since 2005 into shares.
The bond issue, worth a total of 25 million dollars, reaches maturity in July 2010, which is the last opportunity to convert the bonds into shares.
Market sources say that IFC is interested to become a shareholder of Banca Transilvania, given that the 1,5049 RON/share conversion price is lower than the price at the time the bonds were issued in 2005. Last year, the conversion price stood at some 3.6 RON/share, so that IFC would have got less than 1.5% of the bank's shares had it decided to go ahead with this move at that time.
The officials of the institution would not provide a clear answer on this issue. "As far as the IFC is concerned, this issue is more complex, because we always look at the development impact. Especially when it is about a bank which is our client and with which we have worked on a number of products, especially those for financing SMEs in almost every sector," said Ana-Maria Mihaescu, head of the IFC mission in Romania.
Banca Transilvania's biggest shareholders now are EBRD, 15%, Horia Ciorcila, 5% and the SIFs (financial investment companies), which jointly own a 14.6% stake.