The proposed project is an equity investment in Bank Gospodarki Zywnosciowej (“BGZ”), the tenth largest Polish bank in terms of assets and the main provider of banking services to the Polish agribusiness sector and to rural areas.
The EBRD will participate in a capital increase which will result in a minority stake of 15% in partnership with Rabobank International, which will purchase shares from regional and cooperative banks wishing to exist. Additionally it is expected that EBRD and Rabobank will purchase subordinated convertible bonds that will qualify as Tier II capital for BGZ.
The investment by Rabobank and the EBRD will ensure the capital and strategic support necessary to transform BGZ into a modern and efficient universal bank focusing on rural finance. The investment also paves the way for an eventual IPO of BGZ to further strengthen private ownership of BGZ.
The Project represents both a key milestone in the process of final transformation of the Polish banking sector and in the restructuring of BGZ.
The Project will ensure the transfer of ownership of BGZ to the private sector which in and of itself will represent a catalyst for change. BGZ will benefit from the support of the EBRD and Rabobank in the implementation of its Development Strategy. The recapitalisation of BGZ will have an important impact on the transition of the country’s large agricultural and rural communities given the BGZ’s strong role in this sector. It will also provide needed capital to the regional and cooperative banks as it will release them from the shareholdings in BGZ; the transformation of the co-operative sector has been hindered by the slow transformation process of BGZ
Second, the introduction of changes to the Statute of BGZ is a condition for the investment by Rabobank and the EBRD, which will promote appropriate corporate governance standards in this bank including fostering of transparency, accountability and responsibility amongst the shareholders, supervisory board members, managers and employees.
Third, the EBRD’s experience in many previous privatisation and pre-privatisation investments will ensure that BGZ will successfully complete its restructuring to improve profitability and expand its range of products and services as a universal commercial bank.
BGZ is the tenth largest Polish bank in terms of assets (PLN 16.6 billion as at end-2003, EUR 3.5 billion equivalent) and the main provider of banking services to the Polish agribusiness and agricultural sectors and rural areas.
The EBRD will purchase 15% of the share capital and voting rights of BGZ and purchase subordinated convertible bonds when issued for a total investment not to exceed PLN 357 million.
The EBRD and Rabobank together will purchase shares of BGZ and purchase the subordinated convertible bonds when issued for a total amount of circa PLN 1.2 billion.
BGZ will carry out its operations in accordance with EBRD's Environmental Procedures for Local Banks across the full range of its operations. In implementing these procedures, BGZ will require its borrowers to comply, at a minimum, with national health, safety and environmental requirements.
Bank Gospodarki Zywnosciowej
Ulica Kasprzaka 10/16
Tel: +48 22 860
Fax: +48 22 860
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