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| Banca Transilvania Subordinated Loan |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment 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. Board dates are estimates only. |
| Project number | 25399 |
| Company name | Banca Transilvania S.A. |
| Country | Romania |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Active |
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| Date SPI disclosed | September 25, 2006 |
| Projected board date | November 10, 2006 |
| Previous Events | Invested: December 15, 2006
Signed: November 21, 2006
Approved: November 17, 2006 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The proposed transaction consists of a 7-year subordinated loan to Banca Transilvania (BT or the Bank), an existing IFC client, for up to EUR15 million. The objective of this transaction is to strengthen the capital base of the Bank and to enable the Bank to fund its expansion in the growing sectors of the Romanian economy, in particular SMEs and hosuing finance, which are strategic sectors for IFC in Romania. The proposed subordinated loan can count as Tier II capital for the Bank up to 50% of Tier I capital as per banking regulations in Romania. |
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| Project sponsor and major shareholders of project company |
| Banca Transilvania is a mid-sized regional Romanian bank, founded in 1993 by a group of local entrepreneurs and listed on the Bucharest Stock Exchange since 1997. Headquartered in Cluj-Napoca, BT operates through a network of 307 branches and agencies in major Romanian cities and employs over 4,000 staff. BT’s traditional area of strength is SME and retail, however over the years the Bank branched out in other areas, such as leasing, insurance, and investment banking. BT is one of the three banks listed on the Bucharest Stock Exchange. Its shareholding is widely dispersed among legal entities and individuals. |
| Total project cost and amount and nature of IFC's investment |
| The total project cost is EUR75 million. The proposed IFC investment is a EUR15 million subordinated loan for IFC’s own account. |
| Location of project and description of site |
| The Bank is headquartered in Cluj-Napoca, Romania, with 307 branches across Romania. Investments can be made throughout Romania. |
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| Anticipated development impact of the project |
The development impact of this transaction would include:
- providing long term funding to fast growing Romanian SMEs that have become a significant engine of growth, and
- strengthening the Bank’s capital base, facilitating a better asset-liability management and enabling the Bank to expand its financial intermediation capacity. |
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| IFC's expected development contribution |
IFC’s expected development contribution is three fold:
- support the further strengthening of the Bank’s capital base;
- enhance intermediation of term financing to SMEs and to mortgage borrowers;
- encourage improvements in corporate governance, and institutional and environmental capacity of the Bank. |
| Environmental and social issues - Category FI |
This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.
During appraisal, IFC will analyze the FI portfolio and the determine the Applicable Requirements if any, based on an analysis of the potential Environmental and Social risks associated with the FI portfolio. The Applicable Requirements would include:
- the IFC Exclusion List, and/or
- the National Environmental and Social Laws
Based on the Applicable Requirements, the project will be required to:
- Develop an Environmental and Social Management System (ESMS), prior to disbursement that is satisfactory to IFC, to ensures that its investments/activities are in compliance with Applicable Requirements.
- Identify responsible qualified persons to manage the ESMS.
- Commit to implement the ESMS and take action to remedy any gaps in ESMS implementation on an ongoing basis.
- Submit a periodic report to IFC as per a format to be provided by IFC.
IFC will also review, if required, the capacity of the FI to establish and maintain and ESMS and suggest Supplemental Action to address any gaps. |
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| For inquiries about the project, contact: |
Ms. Mihaela Nadasan, Director, International Relations
Banca Transilvania S.A.
8, G. Baritiu St. 40027
Cluj-Napoca, Romania
Telephone: +40 264 40 71 50
Fax: +40 264 40 71 79 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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