Washington DC, November 4, 2003.- The
International Finance Corporation (IFC) and the EBRD are today each taking
a 12.5 per cent, plus one share, equity stake in Banca Comerciala Romana
(BCR), the largest bank in Romania, to support its future privatization.
The combined US$ 222 million investment launches a three-phase strategy
for the privatization of the state-owned bank. The next step will
be the sale of up to eight per cent of shares to employees of the bank,
followed by the sale of the majority stake of at least 51% of the total
shares to a strategic investor. The ultimate privatization of BCR is expected
The privatization of BCR has long been seen by the Romanian government,
and the international community alike, as a critical event for the development
of the country’s economy. Today’s signing should signal confidence
in the banking sector and the investment environment ahead of Romania’s
accession to the European Union, expected in 2007.
As part of the investment agreements, the EBRD, IFC and APAPS, Romania’s
privatisation agency, will help the bank implement an Institution-Building
Plan (IBP) to prepare the bank for privatization by supporting, amongst
other things, business development, improved corporate governance, risk
management, and a review of strategy and operations.
Khosrow Zamani, IFC’s Director of the Southern Europe and Central Asia
department, said during the signing ceremony thatIFC’s participation fits
the Corporation’s commitment to support government’s efforts to banking
sector reform, a key issue for the country’s planned accession to the
European Union.” Mr. Zamani also noted that IFC and EBRD’s involvement
in the implementation of the Institution Building Plan for BCR will catalyze
increased investor interest and improve the terms and conditions for the
Noreen Doyle, First Vice President at the EBRD, speaking in Bucharest,
said today’s signing is a result of the government’s strong commitment
to pursue economic reforms that can further enhance the country’s transition
process. Ms Doyle added that the EBRD and IFC will work with the
bank’s management to further improve BCR, making it a more attractive
institution to potential strategic investors.
Ovidiu Musetescu, the President of the Authority for Privatisation and
Chairman of the Privatisation Commission of BCR, said that signing the
Share Purchase Agreement is of great importance for Romania and a strong
indication of the Government’s commitment towards economic reform. The
EBRD and IFC participation will give fresh force to the development of
this bank, added Mr Musetescu.
Established in 1990, BCR has over 286 branches and agencies across the
country, employs over 11,500 staff and has over 3 million clients.
This transaction follows IFC’s 7-year pre-privatization loan of $75 million
to BCR in December 2002, to strengthen the bank’s balance sheet
by providing funding with a longer tenor. IFC has successfully supported
high profile bank privatisations in several of Europe’s transition economies.
The EBRD’s relationship with BCR dates back to 1996, and since then, both
institutions have worked to support small and medium-sized entrepreneurs
across the country. The EBRD has also provided BCR with loans to promote
mortgage lending across the country.
The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in developing
countries, helping to reduce poverty and improve people's lives. IFC finances
private sector investments in the developing world, mobilizes capital in
the international financial markets, helps clients improve social and environmental
sustainability, and provides technical assistance and advice to governments
and businesses. From its founding in 1956 through FY03, IFC has committed
more than $37 billion of its own funds and arranged $22 billion in syndications
for 2,990 companies in 140 developing countries. IFC's worldwide committed
portfolio as of FY02 was $16.7 billion for its own account and $6.6 billion
held for participants in loan syndications.
The EBRD, owned by 60 governments and two intergovernmental institutions,
aims to foster the transition from centrally planned to market economies
in central and eastern Europe and the Commonwealth of Independent States.
Visit the EBRD’s website: www.ebrd.com