RIGA - Parex Bank, Latvia's largest financial institution by assets, announced it had received a 69.5-million euro loan from a syndicate of Asian banks. The funds were borrowed at Euribor plus 0.65 percent and have a maturity of one year.
The loan was welcomed as a strong sign of support for Latvia's banking industry, which in recent weeks has been the target of speculation after the government promised to crack down on money laundering and suspicious transactions.
A total of 12 banks from Japan, Hong Kong, Singapore and Europe signed onto the loan deal. "Parex Bank is the only institution in the Baltic states that so far has managed to attract great interest in Asian states," said bank vice president Gene Zolotarev, who also owns a majority stake in The Baltic Times.
Parex has been an aggressive borrower both at home and on international capital markets. The bank recently had a 5-million lat (7.1 million euro) bond issue approved by financial authorities and borrowed 117 million euros on international capital markets last July.
Meanwhile, company officials downplayed reports last week in the local media that the bank was actively looking for a strategic investor. Zolotarev admitted that bank officials have sat down with investors who expressed interest in buying a majority stake, but finding a strategic investor was not an end in and of itself for the bank.
Parex started searching for an investor in 2000 with the help of ABN-Amro Rothschild, an investment bank, but later stopped. In the meantime, the bank's two core owners 's Valery Kargin and Viktor Krasovicky 's floated small, closed subscriptions in the past year-and-a-half to raise equity finance and prime the pump for what is expected to be a major public offering on the London Stock Exchange.
Kargin and Krasovicky each own 42.88 percent. At the end of 2004 the bank's assets totaled 1.4 billion lats (or 17.8 percent of Latvia's total banking assets), up 32.9 percent year-on-year.