|
|
 |
 |
| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. |
Summary of Project Information (SPI) |
| |
| Project number | 10836 |
| Project name | Banc Post II |
| Country | Romania |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | Banc Post S.A. |
| Environmental category | FI |
| Date SPI disclosed | July 26, 2001 |
| Projected board date | August 31, 2001 |
| Status | Completed |
| Previous Events | Invested: October 16, 2001
Signed: October 12, 2001
Approved: September 21, 2001 |
|
| Project sponsor and major shareholders of project company |
EFG Eurobank (EFG) is the strategic technical partner with about 19.25% share ownership. EFG is the sixth largest Greek corporate (in market capitalization) and had about US$1.0 billion in gross revenue in 1999. EFG employs about 3700 in 175 branches throughout Greece. EFG provides retail, corporate, investment and merchant banking services to Greek enterprises, private banking to high net worth individuals, as well as mutual fund management, treasury, advisory and custodian services.
Shareholding structure is as follows: EFG Eurobank: 19.25%; BPI: 17%; SOF (State Ownership Fund, now called APAPs): 17%;
GE Capital: 8.75%; Banc Post (BP) employees and management: 8%; and local private investment funds (SIFs): 30% |
|
| Total project cost and proposed IFC investment |
| IFC's investment will be in the form of a convertible subordinated loan of up to $10,000,000, which would replace the existing US$10,000,000 currently outstanding. The new facility will conform with all National Bank of Romania's definition of tier 2 capital. |
|
| Location of project and description of site |
| Banc Post S.A. (BP or the bank) is headquarted in Bucharest and has over 125 branches across Romania. Loans and investments can be made throughout the country. |
|
| Description of company and purpose of project |
On May 29, 1998, IFC approved a US$10 million convertible pre-privatization loan to Banc Post. The loan is fully disbursed and was originally intended to be converted, in whole or part, before June 30, 2000. However, owing to delays caused by post-privatization uncertainty over the shareholding structure of BP, IFC was not willing to convert last year. At the time of the privatization, GE Capital (GE) was to be the strategic technical partner, taking 35% of BP, with Banco Portugues de Investimento (BPI) taking 10%. The remainder was to remain with local shareholders, and both IFC and EBRD provided US$10 million pre-privatization loans with options to convert into equity at the average price paid by GE and BPI. Payment for the shares was to have been made in 12 installments. However, after three installments, GE decided to withdraw from the transaction, and the success of the privatization looked to be in jeopardy. Largely due to the support of IFC and the efforts of BPI, the Greek Eurobank (EFG) was brought in to replace GE. At the insistence of the Romanian authorities, GE remains with the shares that it had already paid for.
With all these changes, it is now apparent that our existing loan does not match the current or future needs of BP or its shareholders. To meet EFG's growth targets, BP needs equity or tier 2 capital, but our existing facility is a senior loan which has already started amortizing.
IFC's convertible pre-privatization loan to BP supported the bank's privatization and facilitated the entry of a strategic technical partner. The positive effects usually associated with privatization are beginning to show also in the BP case: strengthening of management, introduction of new products, efficiency gains and greater competitive. The new investment would further strengthen BP by providing the bank with additional funding necessary to enter new businesses. As a result, Romania should see a deepening and broadening of the financial sector. |
|
| Environmental and social issues - Category FI |
This is a category FI Type 1 project according to IFC’s environmental and social review procedure. BP will establish and implement an environmental management system for its corporate lending and leasing operations to ensure that the activities and enterprises it finances comply with Romanian environmental and occupational health & safety requirements. The management system will include training of BP staff and the provision of an annual environmental report to IFC.
|
|
|
| To contact the project company, please write to: |
Ms. Maria Soltiniou, Advisor to the President and Chairman of the Board
Banc Post S.A.
18 Libertajii Ave., BI. 104
Bucharest, Romania
Fax (401) 336-0772 |
|
|
|