VILNIUS - Russia's Central Bank has given the go-ahead for Konversbank, a small financial institution, to buy a 25 million litas (7.2 million euro) equity issue by Snoras, Lithuania's fourth-biggest bank by assets, Russia's news agency Interfax reported last week.
Konversbank will own 57.6 percent of Snoras after both purchasing the new equity issue and becoming the direct holder of a 49.9 percent stake, which it currently controls by proxy through Incorion Investment Holding Company.
Under Lithuanian law, the new owner will have to launch a buyout of minority shareholders once it consolidates control of a majority stake.
Since Snoras failed to sell the 25 million litas issue within the time limit of one year in accordance with the law, the bank's shareholders had to vote on the capital increase again on March 30.
In March 2003 Konversbank acquired the Incorion Investment Holding Company, the largest single shareholder of Snoras and formerly owned by Alik Gliklad, an Israeli national. Incorion owned 49.9 percent of Snoras at the time of the purchase.
At the start of 2004, Konversbank, which was founded in 1989, had assets of $276.7 million (229 million euros), while Akademchimbank, which is owned by the same shareholders, had assets of $244.4 million.
Snoras' assets totaled 1.3 billion litas at the end of 2003. It had 1 billion litas in deposits and a loan portfolio of 460.5 million litas.
Konversbank, Akademchimbank and Snoras are members of the Konvers Group.
Snoras' shares closed at 7.8 litas on March 29. The bank's market capitalization stood at 108 million litas.