OREANDA-NEWS. September 07, 2009. 25 percent and one share of Parex banka were transferred from the Latvian Privatisation Agency to the European Bank for Reconstruction and Development (EBRD). In this initial transaction, the EBRD acquired 51,444,325 ordinary shares. As part of a future capital increase at Parex banka, the EBRD plans to purchase a further 6,062,500 shares, thus maintaining its stake of 25 percent and one share, reported the press-centre of Parex.

The share purchase fee is equivalent to the share face value. The changes in the shareholder register will be made in the immediate future. The EBRD’s investment in the equity capital together with a EUR22 million subordinated loan will strengthen the capital base of Parex banka and support its restructuring and return to profitability and the private sector. Nick Tesseyman, the EBRD head of Financial Institutions, said, “The EBRD is very pleased to be able to support a bank that plays such an important role in the economy. As a shareholder, the EBRD will work closely together with management to further strengthen Parex banka, especially in its ability to continue financing the enterprise sector.”

Nils Melngailis, Chief Executive Officer of Parex banka said: “I am pleased to welcome the EBRD to our shareholder group. Thereby, Parex banka has acquired a very valuable partner and shareholder experienced in bank restructuring. The attracted resources will enable Parex banka to further develop new services, paying a closer attention to the segment of small and medium enterprises, as investments in this particular segment are vital for the economy to recover.”

As reported earlier, on 16 April 2009, President of the EBRD Thomas Mirow and Prime Minister of Latvia Valdis Dombrovskis, Chairman of Parex banka’s Management Board Nils Melngailis and Chairman of Privatisation Agency Arturs Grants signed Share Purchase Agreements providing that following the increase of equity capital the EBRD will purchase 57,506,825 ordinary shares comprising 25 percent and 1 share of Parex banka’s equity capital. On 23 July 2009, Peter Reiniger Business Group Director for Central Europe and the Western Balkans from the European Bank for Reconstruction and Development visited Latvia to sign the subordinated loan agreement with Parex banka.

To date the EBRD has committed close to EUR450 million to the Latvian economy in various projects in the financial, corporate, energy and infrastructure sectors.