Cartu Bank Equity Transaction

Location:

Georgia

Project number:

39144

Business sector:

Notice type:

Private

Environmental category:

FI

Target board date:

10 Mar 2009

Status:

Cancelled

PSD disclosed:

06 Feb 2009

Project Description

The EBRD is considering the extension of the following facility to Cartu Bank, a medium sized bank in Georgia:
Subscription to new ordinary shares to support the client’s business diversification strategy (both in terms of customer base and in terms of regions) and help to enhance its competitive position in the market.

The operation will support the client’s business diversification strategy across Georgia and help to enhance its competitive position in the market.

Transition Impact

The transition impact of this equity investment will mainly arise from institutional development of the bank through changes in corporate governance, strategy and business development, operations and risk management systems. In addition, this investment will strengthen Cartu’s capital base thereby enhancing the ability of the bank to further expand its market share in Tbilisi and the regions and hence facilitate the competition in the banking sector as a whole. Via the MCFF and SME facilities, EBRD’s support of Cartu will add to the overall lending capability of the banking sector in Georgia thereby increasing financial intermediation. The proposed loans will increase the supply of funding to SMEs thereby increasing access to bank finance.

The Client

Cartu Bank, the sixth largest bank by assets in Georgia with total assets of USD 373 million and equity of USD 64 million, as of end of 2008.

EBRD Finance

Up to GEL 36 million (EUR 16.7 million equivalent) purchase of newly issued ordinary shares representing 25 per cent plus one share of the company’s capital and voting rights.

Project Cost

EUR 32.1 million.

Environmental Impact

Screened F1.

Technical Cooperation

TC will be put in place to assist in the implementation of the Institution Building Plan.

Company Contact

George Nozadze, Head of FI Division
Cartu Bank
39a Chavchavadze Avenue,
0162 Tbilisi
Georgia

Tel: +995 95 22 22 83
Email: gnozadze@cartubank.ge

 

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