OREANDA-NEWS. October 24, 2011. After successful selling of Parex banka’s leasing companies in Russia, the planned sales transaction of Pareks Lizinq and Faktorinq in Azerbaijan was concluded on 20 October 2011 thus recovering additional 3.4 million US dollars. Parex banka has recovered over total of 37 million US dollars from the leasing portfolio in Azerbaijan since the end of 2008 and over 120 million US dollars from leasing companies in Russia. A part of the voluminous funds were channelled for precluding Parex banka’s liquidity crisis in 2008 and another part was channelled for repayment of the State guaranteed syndicated loan worth 164 million Lats which the Bank was able to repay fully this May without additional aid from the State, reported the press-centre of Parex Banka.

“Our main business goal and pledge remains unchanged. It is to recover and repay the maximum of the invested funds to the State therefore selling leasing companies is a natural and logical step. At the same time it is important to select the most optimum action scenario from the possible ones, assessing potential risks and economic gains. The Bank’s business results evidence that the knowledge and experience acquired working in a specific and complex business segment enables us to achieve good results even in the most difficult market conditions,” says Christopher Gwilliam, Parex banka’s Chairman of the Board.

Similarly to selling Parex Leasing and Extroleasing in Russia, the sales transaction of Azerbaijan leasing company was conducted in accordance with the restructuring plan approved by the Cabinet of Ministers and the European Commission. The plan provided for termination of activity of Parex banka’s leasing companies in the CIS by 31 December 2013 by means of selling or winding them up. The plan did not anticipate investment of additional funds in development and maintenance of business activity of these companies.

The advantages of immediate sales became expressly evident when assessing and comparing the possible action scenarios and potential gains of selling Parex banka leasing company in Azerbaijan. The main factors which enabled to acquire absolute confidence in the correctness of the adopted decision:

Large administrative costs which are necessary for ensuring the company’s business and control abroad;

The restriction to make investments in the development of leasing companies’ business determined in the Bank’s restructuring plan;

Legal risks which are related with other countries’ jurisdictions and different business environment in them;

A substantial gain of money;

Visible and transparent structure of the sales transaction, including the remittance of money.

The independent international expert company also found this transaction as the most optimum solution.

Several potential buyers expressed their interest in purchasing the leasing company Azerbaijan. Upon the assessment of the proposals submitted by the potential buyers, SWITLAR investments B.V., a private limited liability company from the Netherlands, was selected as the most suitable partner for the transaction. In accordance with the concluded sales contract, Parex banka has received a payment in the amount of 3.4 million US dollars.  Presently Parex banka continues to assess selling opportunities of its leasing company in Ukraine.     

Additional information:
Concluding an advantageous transaction on the selling of Parex Leasing and Extroleasing, its subsidiaries in Russia, to a company of the Unicorbank group (Russia), Parex banka left the leasing business in Russia in September 2011. The first payment already recovered more than USD 14.5 million. Until the end of 2013 Parex banka is going to continue receiving payments from gradual selling of the leasing company’s problematic asset portfolio. The well-considered structure and conditions of the transaction will ensure the flow of funds necessary for repayment of the State investments thus facilitating accomplishment of the goals determined in the restructuring plan. The funds recovered from Russian leasing companies are significant – over USD 120 million have been received since the State became the chief shareholder of Parex banka.