The Romanian Development Bank (BRD) was recently privatised with the acquisition by Société Générale (SG) of 51% of the shares in the BRD. The proposed equity investment consists of the purchase by the EBRD of 5% of the shares in the BRD.
The principal objective of the EBRD’s investment in BRD is to strengthen the long-term relationship with BRD and support its development. The credit line will be used to continue to support BRD’s lending to small and medium-sized enterprises in Romania.
The investment project supports the first privatisation in the Romanian banking sector: the EBRD’s continuous support to SG-BRD has high demonstration effects for the international investment community. The on-lending of the credit line by BRD will assist the growth and expansion of creditworthy Romanian SMEs.
Established in 1990 as a state owned bank, BRD is the second-largest commercial bank in Romania. BRD has 185 branches across the country, and over EUR 1 billion in assets. BRD is now part of the Société Générale group.
The EBRD will make an equity investment of US$ 20.8 million in BRD. In addition, BRD has benefited from sovereign- guaranteed loans from the EBRD since 1994, which will be replaced by a private sector credit line of US$ 45.2 million.
The privatisation of 51% of BRD amounted to a capital investment of US$ 200 million by SG. The total project costs financed by the private sector credit line, including capital contributions from sub-borrowers, is estimated at USD 70 million.
BRD will continue to carry out its operations in accordance with EBRD's environmental procedures for Local Banks. In implementing these procedures, BRD requires its borrowers to comply, at a minimum, with national /local health, safety, environmental and public consultation requirements.
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