Peter Reiniger Business Group Director for Central Europe and the Western Balkans from the European Bank for Reconstruction and Development visited Latvia to sign subordinated loan agreement with Parex banka.

Peter Reiniger Business Group Director for Central Europe and the Western Balkans from the European Bank for Reconstruction and Development visited Latvia to sign subordinated loan agreement with Parex banka. This will enable the share purchase deal to be finalised in August 2009.

Nils Melngailis, Chairman of Parex banka’s Management Board, commented on the signed subordinated debt agreement: “We are very pleased that since 29 June 2009 the EBRD is represented in Parex banka’s Supervisory Council. Moreover, with the signed agreement we are one step closer to the EBRD’s entrance in Parex banka’s share capital; thus, sending a very positive sign not only to our existing clients, but also to potential clients and investors in regards to the development and recovery potential of the Bank.”

Peter Reiniger, Business Group Director for Central Europe and the Western Balkans from the EBRD stated: “We look forward to completing our investment in Parex bank which will be our largest transaction in Latvia to date. EBRD's participation in the recapitalisation of Parex bank is an indication of our confidence in the recovery process of both the bank and the Latvian economy.”

As previously announced, a prerequisite to completion of the Sale Purchase is signing of the agreement by which the EBRD will provide Parex banka with a subordinated loan of € 22 million qualifying as Tier 2 capital. Following the increase of equity capital at Parex banka the EBRD will purchase 25% and one stake in the Bank.