ZF English

BCR sale, over 50 million-euro business for consultants

23.12.2005, 18:49 10

Investment banks, consultants, lawyers and auditors will collect more than 50m euros from the sale of the largest bank in Romania, a transaction worth 3.75 billion euros.

The business generated by the privatisation of Banca Comerciala Romana exceeds this value if considering the plane tickets, the hotel bills, the hiring of translator teams or some catering services paid for hundreds of people that were directly involved in this process, which adds additional millions of euros to the payrolls of the banks involved.

More than 40 million euros. This is what the fees of the consultants, lawyers, investment banks and auditors that assisted the seller and buyer in this deal amount to.

On the seller''s side, a team of some 8 to 10 people from Daiwa Bucharest worked on this transaction, in addition to up to 18 lawyers from Nestor Nestor Diculescu Kingston Petersen (NNDKP), with the total team comprising 40 people, the Privatisation Commission members included.

On the other hand, Millennium had up to 100 people working for it from the investment bank UBS, from advisory firm McKinsey, auditors and lawyers from Portuguese firm Morais Leitao Galvao Teles Suarez da Silva, and Romanian lawyers from Radu Taracila Padurari Retevoescu.

However, the biggest privatisation in Romania, which happens to also be the biggest deal conducted on this market thus far, did not translate in very large amounts collected by consultants compared with other deals. According to sources close to this deal, the consultant of the state for the sale of Banca Comerciala Romana, Daiwa, assisted for legal matters by the NNDKP lawyers, collected less than 20 million euros, which is lower than the amount collected at last year''s sale of Petrom, when the consultants of the state got 22 million euros. Market sources say Daiwa alone got 17 million euros. The BCR sale deal is considered more sophisticated than the sale of Petrom considering the complexity of the negotiation process with two bidders in the final stage and the large number of entities involved in this deal - the state through the State Assets Resolution Authority (AVAS), the European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC), the five SIFs, in addition to the banks interested in the acquisition of BCR.

"In terms of complexity, the Petrom and BCR deals are comparable. Beyond the specific aspects of each sector, one of the problems we were concerned about in BCR''s case was the contractual regulation of the historical consequences of BCR''s takeover of Bancorex, where we benefited from the expertise of the buyers as regards the European law," says Ion Nestor, senior partner with Nestor Nestor Diculescu Kingston Petersen. NNDKP assisted OMV in Petrom''s acquisition last year, too.

On the other hand, Erste Bank''s costs with its consultants are comparable to those born by the seller. adrian.mirsanu@zf.ro

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