RIGA - Parex Bank sold shares in a closed subscription among a group of high-profile investors, including Sweden's Svenska Handelsbanken and Julius Baer, a U.S.-based investment fund.
Bank spokesman Viktors Zakis said that investors purchased 1.7 million new shares without voting rights, thereby raising the bank's equity capital to 5.1 million lats (7.43 million euros). The international investors purchased 99.94 percent of the new emission and Latvia's investors 0.06 percent. The price per share was 3.04 lats, significantly higher than what Parex, Latvia's largest bank by assets, had wanted when first bringing in outside investors.
"In this emission the share price increased by 38 percent compared with previous emissions, which reflects the strengthened investor interest in the Baltic states region and faith in the bank's future," said Zakis.
The emission is a part of the bank's long-term program designed to diversify its capital structure and shareholder structure and ultimately to take the bank public.
It was unclear exactly how many new shareholders the bank acquired through the emission, or how many shares were purchased by Svenska Handelsbanken and Julius Baer. But Zakis said that the latter two companies acquired the largest lots.
Bank Chairman Viktors Krasovickis said that demand for the bank's shares had exceeded the supply significantly. "The interest shown in Parex Bank shares by giant international institutional investors has led to the conviction that the bank's shares will draw large interest on stock markets" when the bank goes public, Krasovickis said.
The bank has repeatedly stated its intention to acquire a listing on a major international stock exchange, which is likely to take place in 2005. Zakis did not rule out the bank's shares could be traded on the Riga Stock Exchange.
"The goal has not changed, but the decision has not been made yet," he said.
The latest share emission raises Parex Bank's equity capital to 65 million lats, up from 63.3 million lats.
The largest owners of Parex Bank, even after the new stock emissions are bank heads Valerijs Kargins and Viktors Krasovickis. After the emission, Kargins and Krasovickis each holds 42.88 percent in the bank.