Erste Bank Raises EUR1.74 Billion From Capital Hike To Lift
Ratios
By Digby Larner, Of DOW JONES NEWSWIRES
Austria-based lender Erste Group Bank AG (EBS.VI) said Tuesday it raised
EUR1.74 billion from shareholders and new investors with a capital increase
intended to help it recover from the financial and economic crisis.
The capital increase was announced at the end of October and closed Monday, a
day earlier than originally planned. The bank placed 60 million shares at a
EUR29 each.
Erste said more than 60% of subscription rights were exercised, including by
Spain's Criteria CaixaCorp SA (CRI.MC)--the investment arm of Spanish savings
bank La Caixa--and that the remaining shares were sold to international
institutional and Austrian retail investors.
Criteria's stake in Erste Bank was lifted by the capital increase to around
10% from 5.1% previously.
The bank, which took EUR1.2 billion in state aid to bolster itself against
rising loan losses and strengthen its capital ratios, said the capital increase
will lift its pro forma core Tier 1 ratio to 7.9% at Sept. 30, from 6.5%.
Erste said it won't use the funds to repay government cash it received earlier
this year, but will substitute a previously planned issue of government-
sponsored hybrid capital with common equity.
"I believe that the successful placement of our offering underlines investor
confidence in Erste Group and its excellent strategic positioning even in these
challenging times," said Chief Executive Andreas Treichl.
"Central and Eastern Europe is still seen as a region with significant growth
opportunities and we are very well-positioned to benefit from these growth
prospects in the region," he said.
The new shares are due to start trading on the Vienna, Prague and Bucharest
Stock Exchanges on Nov. 19.
Erste, Goldman Sachs International and JP Morgan acted as joint global
coordinators and joint bookrunners for the offer. Citi, Credit Suisse and UBS
acted as co-lead managers.
At 1016 GMT, Erste shares were up EUR0.33, or 1.1%, at EUR29.34, outperforming
the Stoxx Europe 600 bank index, which was down slightly. The shares have risen
almost 81% since the start of 2009 and have more than doubled over the past
year.
-By Digby Larner, Dow Jones Newswires; +33 1 4017 1748; digby.larner@
dowjones.com
(END) Dow Jones Newswires
11-17-090604ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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