A pre-privatisation subordinated convertible loan of up to US$ 10 million to Bank Post to support its privatisation, which is anticipated to take place in 1998.
The main objective of the facility is to support the privatisation process that is scheduled to take place before the end of 1998 by encouraging interest from investors. The strengthening of BP's capital adequacy will also allow further expansion and diversification of its business together with the other specific objectives of the facility. These concern lending to corporate customers, developing new products, achieving integrated computerisation and supporting BP's development.
By supporting the privatisation of Bank Post, a major state-owned bank, the operation will contribute to the promotion of a sound private banking system in Romania and will facilitate the financing of private corporate customers.
Bank Post (BP) was established in 1991 as a fully state-owned joint-stock company and began operations in early 1992. It has developed as a commercial bank, providing services to corporate as well as retail customers. Its corporate client base includes Regies Autonomes (national companies in strategic sectors of the Romanian economy) as well as the increasingly important small and medium-sized companies in the private sector. BP now competes with a broad spectrum of Romania's larger banks for lending opportunities and deposits.
A subordinated convertible loan of up to US$ 10 million extended for a period of 10 years, which will form part of BP's capital base, with an option to convert into ordinary shares of BP.
The total project cost is US$ 10 million (ECU 9.0 million).
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 Romania. On an annual basis, Bank Post will report to the EBRD on environmental issues.
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Text of the PIP