American investment fund Broadhurst, managed by New Century Holding Capital (NCH Capital) is interested to take over the controlling interests in Libra Bank through a series of Romanian companies (Romarta Bucharest inclusive) it holds.
Banking sources say the complete file for securing endorsement of this transaction is to be submitted to the National Bank of Romania (NBR) one of these days. The deal revolves around $12-$14 million.
Broadhurst is the largest investment fund on the Romanian market, dealing in milling and bakery, cereals, commercial space, electronics etc; its Romanian investments amount to about $200 million at the moment.
Broadhurst has been planning to acquire a bank for a long time. It has been constantly probing the market since 2000, contemplating Romanian International Bank or even Banca Turco-Romana (Turkish-Romanian Bank). Sources said it was even planning to set up its own bank at some point in time, but did not secure NBR's approval.
The conclusion of this deal could solve Libra Bank's problem, as it has a rather complicated situation at the moment. It is about a shareholder problem and not about a financial or banking prudence indicators issue. Libra Bank is currently held by a group of 19 Turkish or Cypriot shareholders, which own less than 5% in the bank each.
The bank's officials could not be reached for comment yesterday. They have actually been rather reluctant to make statements over the last few months.
Libra was supposed to address its shareholder-related issue ever since last year, as it had already been watched by NBR for several months. The central bank has repeatedly warned the management to address the issue, that is the shareholders' domicile problem. Part of Libra Bank's shareholders were domiciled in areas not accepted by the NBR, that is in Northern Cyprus to be precise. The quoted sources say NBR has allegedly prohibited the shareholders to vote, rendering them unable to exert their option in case of a capital increase, considering Libra Bank will have to come up with a solution for increasing its nearly 280bn ROL capital to 350bn ROL by the end of May.
Libra Bank has been up for sale for more than two years now, yet nothing came out of it, even though its shareholders almost completed negotiations. Several financial or non-financial groups have shown interest in Libra Bank in the course of time, with the most serious negotiations carried out with Italy's IMM Innovazione Moda Maglieria apparel company.
Rumour had it early this year that businessman Ovidiu Tender was also interested to buy the bank.
Libra Bank was established in 1996, with Viorel Catarama and the former Defence minister Victor Babiuc among its founders.
It was transferred to a group of Turkish and Cypriot shareholders in April 2000. The latest financial data released show it to have posted 15.5bn ROL (nearly 500,000 euros) gross profit in 2001.
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