EBRD to take new bank

  • 1999-03-25
VILNIUS (BNS) - A delegation from the European Bank of Reconstruction and Development was slated to visit Vilnius March 23 to finish talks on investment into Lithuania's Zemes Ukio Bankas.

Lithuanian Finance Minister Algirdas Semeta said the only unresolved issue is administration of the Rural Support Fund and other funds at Zemes Ukio Bankas.

The Lithuanian Parliament must amend the law on Zemes Ukio Bankas' privatization before the EBRD investment can take place.

The central bank has already registered a reduction in Zemes Ukio Bankas' capital, and later will have to register a capital boost.

The EBRD will swap its shares in Lithuania's Vystymo Bankas for state-owned shares in Zemes Ukio Bankas. The European bank will also convert part of a 15 million deutschemark subordinated loan extended to Zemes Ukio Bankas last summer into its shares.

Semeta said the share swap would be based on a simple principle - the shares will be exchanged at their book value.

The EBRD holds 29.63 percent of shares in Vystymo Bankas worth around 14.1 million litas ($3.53 million). Following the planned share swap, the EBRD will own around 14 percent of Zemes Ukio Bankas' shares.

It will be allowed to boost the stake up to 35 percent by the loan conversion.

Following the EBRD investment, the remaining more than 50 percent of state-owned shares will be passed over to the State Assets Fund which will try to sell off the bank after a privatization tender failed last year.