OREANDA-NEWS. April 23, 2009. The Government of Latvia together with the Privatisation Agency, a majority shareholder in Parex banka, and Parex banka signed the Share Purchase Agreement and the Shareholders Agreement with the European Bank for Reconstruction and Development (EBRD), reported the press-centre of Sorainen.

The investment comes under the crisis response package which EBRD has drawn up to support the banking sectors in its countries of operations to ensure that financing flows continue, in particular to small and medium sized enterprises.
 
The financial package for Parex banka includes the acquisition of 57,506,825 shares having voting rights and collectively representing 25% plus one share of the total share capital of Parex banka for LVL 57.5 million (EUR 81.82 million) and a subordinated loan of EUR 22 million qualifying as Tier 2 capital of Parex banka. The purchase price for one share is LVL 1 (EUR 1.42).
 
As a shareholder EBRD will be able to participate in the development and implementation of a strategic plan for the restructuring and refocusing of Parex banka business activities. Following its capital injection EBRD will be represented on the supervisory board.
 
The closing of the transaction is subject to a number of conditions precedent. Including, the Government of Latvia needs to receive an approval of state aid measures from the European Commission for increasing Parex banka’s share capital and fulfilling other obligations under the agreements.
 
Sorainen in this transaction represented interests of Latvian Privatisation Agency and its shareholder – Republic of Latvia in negotiations and drafting of the agreements. Our team was led by partners Eva Berlaus-Gulbe, Agris Repss and senior associates Brigita Terauda, Lauma Berzina and Rudolfs Engelis.