Wednesday, October 19, 2011

Romania’s SIF1 May Sign Erste Agreement in November, CEO Says

Oct. 18 (Bloomberg) -- SIF Banat-Crisana SA shareholders probably will approve on Nov. 4 an agreement to sell a minority stake in Banca Comerciala Romana SA, Romania’s largest bank, to Erste Group Bank AG, Chief Executive Officer Ioan Cuzman said.

The fund, also known as SIF1, is one of four Romanian investment funds known as SIFs that agreed to sell their 24.1 percent stake in BCR to Erste for cash and shares worth 435 million euros ($596 million). SIF1 plans to sign the agreement “immediately after shareholders’ approval,” Cuzman said in an interview in Bucharest today.

“I am very confident that we’ll receive the positive vote of our shareholders to sign this agreement,” Cuzman said. “Probably all the SIFs will get a bonus from Erste, on top of the announced amount, because the bank didn’t pay dividends.”

Erste, eastern Europe’s second-biggest lender, would increase its holding in BCR to 93.5 percent and would pay 453.9 million lei ($143 million) in cash for the SIF-held stake. The funds will also get stakes in Erste of as much as 1 percent each through a share swap.

Another fund, SIF Muntenia SA, said last week it already agreed to sell its BCR stake and will get about 70 million lei in cash, 13 million lei more than initially stated, and 2.5 million shares in Vienna-based Erste.

The other SIFs will probably agree individually on the sale by Nov. 14, when a shareholders’ meeting is scheduled to vote on a BCR capital increase worth as much as 618 million lei, according to Cuzman.

Capital Increase

Erste Chief Financial Officer Manfred Wimmer said on Sept. 16 that the Austrian lender can support the capital increase at its Romanian unit on its own.

“We’ll have to talk to Erste about this capital hike because its purpose has to be clear,” Cuzman said. “I know that the capital-adequacy ratio is not an issue, so probably they want to have an over-financing for their operations.”

The four SIFs that signed the agreement in principle are SIF Banat-Crisana SA, SIF Transilvania SA, SIF Muntenia and SIF Oltenia SA. SIF Moldova SA, which was left out of the accord, may also consider selling its stake in BCR, following shareholder approval.

--Editors: James M. Gomez, Douglas Lytle

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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