RIGA - Latvijas Krajbanka announced last week that it planned to go to individual investors to raise finances with an equity emission worth 2 million lats (3 million euros) and that it would list its share price on the stock exchange.Shareholders approved the emission at an April 23 meeting, their third attempt to have the move approved.
The bank will issue 2 million shares at 1 lat face value each, which will raise the bank's share capital to 11.1 million lats, and will sell the new equity at 1.07 lats per share.
Krajbanka shareholders, many of which are located offshore, authorized the board to draft a prospectus for the initial public offering in two months, as well as proposing the relevant amendments to the articles of association.
All bank shareholders will have pre-emptive rights to buy the newly issued shares.
The board was also authorized to take all measures related to preparing the launch of quotation of stocks on the bourse.
Previously Krajbanka had been planning to list shares for several years, but shareholders were unable to increase share capital due to disagreements.
In fact, the decision to opt for public equity over private equity - the route currently preferred by most financial institutions now in the Baltics - could be connected with the bank's complex web of shareholders and the lack of transparency, analysts have speculated.
The bank's largest shareholders are registered in several countries, though it is believed that ultimate control over Latvia's 10th largest financial institution by assets lies with Russian interests.
After a couple of transactions registered in March, the bank's largest shareholders include former bank president and former MP Arnolds Laksa (12.46 percent), Netherlands-registered Macasying Holding (9.87 percent), British Virgin Island-based Doxa Fund Limited (9.6 percent), Carbery Services Limited (8.24 percent), Alkahn Power Company (7.14 percent) and U.K.-based Hafra Limited (6.9 percent).
A group of Ventspils-based shareholders led by Ventamonjaks also controls an equity interest, and they have been trying - so far unsuccessfully - to have last year's auction for 25.01 percent of Latvijas Krajbanka annulled in the courts.
Krajbanka President Andris Natrins said he welcomed the decision to boost capital by a public emission, though earlier shareholders had planned to do so through a closed stock emission.
He predicted that bank shares could be listed on the Riga Stock Exchange as early as June, though it was unclear if the stock would be listed in the exchange's official or second list.
Natrins also said that a final meeting to decide on the prospectus would be held no later than June 23.
The bank's paid-in share capital is 9.1 million lats. Of these, 2 million lats' worth have been in public trade since 1998 and 1.8 million shares were put on public trade in March, 2003. Approximately 20,000 shares of the bank board will not be in public trade.
