Parex welcomes new shareholders

  • 2003-08-21
  • TBT staff
RIGA - Parex Bank, Latvia's top financial institution in terms of assets, completed a limited share emission earlier this summer, the first step in what bank officials describe as a long-term plan to bring the bank to public.
The emission consisted of a closed subscription for both individuals and legal entities with close relations to the bank and brought 16 new shareholders to Parex, press secretary Viktors Zakis said.
For Parex, which was 100 percent owned by two individuals – founders Valery Kargin and Viktor Krasovitsky – the appearance of such a large group of new shareholders signifies a major turnaround in corporate strategy.
In all, subscribers bought 5.06 percent of outstanding bank shares (58,746,810) for a total of 6.24 million lats (9.6 million euros).
Own capital – capital plus reserves – of the bank increased to 96.8 million lats as a result of the emission.
Although a complete list of the new shareholders is not yet available, a few names – President of Itera Latvija Yuris Savitskis, former Latvijas Kugnieciba board member Vladislav Driksne and Filop Raevskis of Mediju Tilts – filtered through the local press.
Some 62 percent of shares purchased went to foreign entities. One of them, East Capital Baltic Fund, told The Baltic Times it was pleased with the emission.
"It is a very good franchise," said Peter Elam Hakansson, fund manager of East Capital, which is based in Stockholm. "We like the strong position of Parex in the retail and corporate finance sectors" of Latvia, he added.
Hakansson, whose fund buys equity in all three Baltic countries but is only 7 percent invested in Latvia, said the purchase of Parex shares was a step in increasing its exposure to Latvia.
Zakis said that bank President Kargin and Chairman of the Directors' Council Krasovitsky intended to meet with all the new investors on Aug. 21.
According to the press secretary, the limited subscription is the "first step" in opening up the bank to the public. There will be one more closed subscription – later this year or in the beginning of next.
The bank's ultimate goal, said Zakis, is to go public and have Parex's stock quoted on a major exchange.