German Government to Buy Shares in Rostov’s Bank

Published: 31 July 2005 y., Sunday

Center-invest Bank revealed yesterday the name of its new shareholder - Deutsche Investitions- und Entwicklungsgesellschaft (DEG), an investment unit of Kreditanstalt für Wiederaufbau (KfW) banking group. This announcement explains why Deutsche Bundesbank President Ernst Weltek appeared in the small Rostov-on-Don based bank's board.
DEG investment company is 100-percent owned by KfW banking group, whose subscribers are the German Government (80 percent) and governments of the country’s states (20 percent). Center-invest Bank occupies the 118th place among Russian banks by its net worth and ranks 85th in terms of net assets as of April 2005. The bank announced yesterday than an extraordinary general meeting decided to increase the bank’s authorized capital by 31 percent. The bank will issue 14.5 million additional stocks, 3.65 million of which will be bought by the European Bank for Reconstruction and Development (EBRD) that now hold 20.38 percent in the bank. However, the share of the EBRD will remain the same as DEG will acquire the rest 10.85 stocks.

DEG’s intentions now explain why the former head of Deutsche Bundesbank became the member on the bank’s board of directors early June. The press service of Center-invest bank said the first group of financiers from DEG visited the bank mid-January this year to discuss the opening of a credit line for crediting small business and real estate mortgages. An agreement was reached three months later and the German governmental company granted the bank with a five-year credit line to the sum of $7.5 million. DEG’s possible purchase of the bank’s stake had been negotiated ever since.

Šaltinis: kommersant.com
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