Germans consider ERA investment

  • 1999-02-25
TALLINN (BNS) - The suspended ERA Pank managed to find a foreign investor who will save the bank from bankruptcy.

ERA council Chairman Andres Bergmann said Germany's investment company DEG announced its readiness to invest in the bank.

This information was confirmed by DEG's Chief Investment Manager Josef Schnepper in his interview with the Eesti Paevaleht .

But before the Estonian bank will get German money, it will have to fulfill a number of conditions. Bergmann said present bank owners have already met one of the conditions to increase the bank's stock capital.

Under a provisional accord, DEG would invest about 16 million kroons ($11.5 million) in ERA's stock capital. It will also supply the bank with medium-term credit lines necessary for maintaining liquidity.

"Since loans issued earlier have been coming back all the time, ERA Pank only needs 40million -50 million kroons in credit lines," Bergmann said.

He said the total share capital expansion of ERA Pank would amount to nearly 60 million kroons. Besides present owners and DEG, a future strategic investor is expected to invest some 16 million kroons. Talks with the potential investor have still to be completed, the bank leader said.