EBRD Board nods on buying 15% stake in Erste Hungary
"EBRD board has just approved that the bank will be in a position to take a 15% equity stake subject to finalisation of talks between state and Erste Bank," Reuters cited spokesman Axel Reiserer as saying.
He said the EBRD, which first agreed on the transaction in a landmark accord with Prime Minister Viktor Orbán's government, hoped to sign the agreement in the second quarter. Reiserer declined comment on the price.
Erste CEO Andreas Treichl said in conference call today the confident deal to sell stake in the Hungarian unit to the state will be completed by mid-June.
This remark is interesting because when asked about the purchase of Erste Economy Minister Mihály Varga replied to business daily Világgazdaság on 25 April that:
This needs to be considered. Due diligence of the bank has been completed; there is a price level, but the government can still decide that instead of buying [a stake in] Erste it is more useful for the long term if we lower [public] debt.
When we asked Treichl last March why was it necessary that the Hungarian government and the EBRD each should be given a 15% shareholding in Hungarian Erste Bank, he replied:Because, as a symbolic gesture, it enhances cooperation. As for the EBRD, we realised that the Hungarian government wanted to involve an all-European player whose presence would bolster commitment. Ultimately, it was Erste that invited this European organisation. So there are three agreements: one between Erste and the EBRD, another between Erste and the Hungarian government, and yet another between the EBRD and the Hungarian government. Only the latter has been signed in which the Hungarian government committed itself to reduce the banking tax. Negotiations with Erste are still under way though, but we hope to conclude them by the middle of the year.
