Banca Transilvania will ask 35 million euros in cash from its shareholders in order to continue its development process. The capital increase will be done by distribution of bonus shares and sale of new shares at a price lower than the quote on the Bucharest Stock Exchange. The capital of the bank will be increased by 45 million euros to approximately 111 million euros.
The money is to be used for the bank''s development strategy over the next few years. After all, the bank''s chairman and also one of its founders, Horia Ciorcila, says that even though many investors are interested, the bank will not be sold over the next few years, because there is still room for growth. Furthermore, the bank is interested in possible acquisitions on the banking market, but cannot find something worth buying.
"Our concept is an organic growth even greater than in the previous years and we plan to achieve a 5.5-6% market share by the end of 2007 and 300 branches by the end of this year, for instance, with the money spent for this purpose," Horia Ciorcila told ZIARUL FINANCIAR. The bank''s market share at the end of the year stood at 3.9%, after Transilvania grabbed another slice of 0.5% of the banking market.
Shareholders will have the right to subscribe 0.15 new shares at a price of 0.35 RON/share. Out of this price. 0.10 RON are the par value, and 0.25 RON are the issue premium. If the bank sells all the shares, it will boost its capital by 10 million euros, but will actually get some 35 million euros in its accounts.
In addition, the shareholders are to get approximately 0.509 new shares for every share held, as proposed by the Board of Directors. The increase will be done by including in the share capital the issue premiums from last year''s increase, worth 11.4 million euros and by including the accounting reserves made from the net profit, 22.9 million euros.
Ciorcila added that part of the money is to be directed to the companies in the bank''s group, such as the insurance company, in need of cash to continue growth. "We want to continue to develop the group concept, because it is not the bank alone that has brought customers to the companies in the group lately, but also they brought customers to the bank," Ciorcila said.
"We are not negotiating over the sale with anybody now, although we''ve had many investors interested, especially lately. I don''t think the sale of the bank will happen in the next few years because we want to continue to grow organically and have a strategy until 2008. Not only are we not planning to sell, but also we are interested in possible acquisitions," Ciorcila stated.
He explains that the bank cannot find a target for acquisition yet. "The banks up for sale are not interesting in terms of the market share boost they would generate. On the other hand, those that could be interesting have no intention of taking this step," he added. The General Meeting of Shareholders called for the end of April will have to elect a new Board of Directors for the 2006-2010 period. The makeup of the Board will probably not undergo any changes, since all its current members are running for a new term. vlad.nicolaescu@zf.ro
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