Loan repayment scheme worries lenders

RIGA - Due to the international lenders’ objections, Parex Bank will have to seek different ways to repay the syndicated loan due this May, which will require 164 million lats (234.2 million euros), according to unofficial information, reports news agency LETA. At the moment, Parex Bank still lacks the resources needed for repayment of the syndicated loan and the bank has considered attracting funding from the joint-stock Citadele Bank.
The lenders, however, did not support the idea, and pointed out that Citadele Bank does not need new credit obligations during its sale.

The bank has also considered turning to the Bank of Latvia and the State Treasury.
Parex Bank head of Communication and Marketing, Marita Ozolina-Tumanovska, emphasized that the bank is focusing on accumulating the necessary amount of money to repay the syndicated loan and will not require government assistance.

Since Aug. 1, 2010, when Parex discontinued rendering such typical banking services as account and deposit services, loan issuing and others, the main objective of the bank has been the maximum recovery of state investments. For this, the bank focuses its activities on effective loan restructuring, debt recovery, as well as management of real estate taken over.
The bank posted 152.7 million lats in losses last year, compared to 111.1 million lats in losses in 2009.