The negotiations by which the European Bank for Reconstruction and Development (EBRD) is to take over about 15% in Banca Transilvania are about to be completed. The negotiations started last year, but were dropped several times, sources on the banking market told Ziarul Financiar.
The details transacted at the moment are the exact price of the deal, as well as the stake to be sold and how it will be done. The deal is expected to be closed by July-August.
According to the current operational statute of Banca Transilvania, none of the shareholders may hold more than 5% in the bank's capital, which means the statute has to be modified in order to conclude the transaction with EBRD.
Banca Transilvania management is to summon a General Shareholders Assembly by mid this month, whose agenda may include the modification of the bank's operating statute or a derogation of the current one.
EBRD has several possibilities to hold stake in Banca Transilvania's share capital such as a capital increase, or the purchase of a stake from the current stockholders. Given Banca Transilvania's history of successive capital increases, we may witness such a strategy put into effect again.
EBRD started talks with Banca Transilvania about purchasing a stake last year, after the latter's Board of Directors and shareholders agreed to it.
EBRD is one of the largest institutional investors in Romania, having invested more than $1bn so far. It now holds stake in the following banks in the Romanian banking sector: Alpha Bank Romania, Banca ?iriac and Banca Romana pentru Dezvoltare (Romanian Development Bank).
The analysts deem Banca Transilvania as one of the most dynamic companies listed on the Stock Exchange.
Ever since it was established, Banca Transilvania has been one of the most traded companies on the Stock Exchange, as the price fluctuations and the high liquidity allowed for short and medium-term speculative gains.
The best move the bank management has ever made is, where the Stock Exchange is concerned, the strategy to increase the share capital on a yearly basis.
In spite of the large profits made every year since going public on the Stock Exchange, the bank has never paid dividends in form of money. The management chose to keep the earnings inside the bank and use them for expansion purposes.
Whereas it was registering 26.3bn lei in share capital when first listed on the Stock Exchange, Banca Transilvania is about to complete the fifth capital increase and reach 368bn lei in share capital.
The history of the capital increases is as follows: from 26.3bn to 50bn lei in 1998 (two operations), to 100bn lei in 1999 and to 173.69 bn lei in 2001.
Although its sound financial results had a certain influence, Banca Transilvania shares fluctuated mainly because of the successive capital increases by distribution of bonus shares.
Banca Transilvania's quote has repeatedly gone up and down in the course of time, depending on the deadlines for registering those benefiting from bonus shares. This year for instance, the price of the shares went up to 3,000 lei before the deadline expiry only to go down to 1,300 lei in a matter of sessions.
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