DNB NORD LIETUVA (FORMERLY NORD/LB LIETUVA) SUBORD LOAN

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Project ID 4270

Status Complete

Location

Lithuania

Business Sector

Financial Institutions

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Project ID 4270

Status Complete

Location

Lithuania

Business Sector

Financial Institutions

Notice Type

Private

Environmental Category

Approval Date

21 Jul 1998

Disclosure date

02 Jun 1998

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

A pre-privatisation subordinated convertible loan of up to DM 20 million to the Lithuanian Agricultural Bank (AB) to support its re-capitalisation before its privatisation, which is anticipated to take place in 1998.

The operation will enable AB to strengthen its capital base, boost its liquidity, have sufficient financing to continue its restructuring process and leverage its resources to increase lending to Lithuanian corporate and retail customers.

Transition Impact

The strengthening of AB's capital base is expected to facilitate its privatisation by presenting to interested investors an institution with improved financial strength and a financial investor prepared to participate in the privatisation.

The Client

Lietuvos Zemes Ukio Bankas (AB) is a commercial bank owned primarily by the Lithuanian Ministry of Finance (MoF), with 87 per cent. The Ministry is committed to privatise AB in the next 12 months. The AB is the third-largest bank in Lithuania in terms of assets and branch network (only the Savings Bank has a larger branch network). Compared with other Lithuanian banks, AB ranks first in terms of outstanding loans (LTL 975 million) and third in terms of total deposits (LTL 851 million). At the end of 1997, the Bank employed nearly 2,500 staff.

EBRD Finance

A subordinated convertible loan of up to DM 20 million extended for a period of seven years, of which the EBRD will provide DM 15 million and DEG the remaining DM 5 million. The subordinated convertible loan will be counted in AB's Tier 2 capital and will include an option to convert into ordinary shares of AB at or after privatisation.

Project Cost

The total project cost is DM 20 million.

Environmental Impact

The Bank will adopt and implement environmental procedures satisfactory to the EBRD, and all activities will be required to comply with the Bank's FI Environmental Exclusion List. All borrowers will be required to comply, at a minimum, with health, safety and environmental standards and regulations and public information/participation requirements in Lithuania. On an annual basis, AB will report to the EBRD on environmental issues.

Technical Cooperation

Technical cooperation funding will be provided for training AB's staff in the application of the EBRD's Environmental Guidelines.

Company Contact

PSD last updated

01 Feb 2019

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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