April 6, 2016 / 5:55 AM / 3 years ago

UPDATE 1-Polish Alior Bank plans $587 mln share issue to finance BPH deal

(Adds more detail, CEO comment)

WARSAW, April 6 (Reuters) - Polish bluechip lender Alior Bank plans to raise up to 2.2 billion zlotys ($587 million) from a rights issue of shares to finance its flagged takeover of local rival BPH and strengthen its capital base, it said on Wednesday.

Alior, controlled via a 25.2 percent stake by Polish state-run insurer PZU, wants its shareholders to approve the issue of 220 million shares with pre-emptive rights for existing shareholders at a meeting called on May 5.

The issue comes after the lender agreed to buy BPH’s core business from General Electric for 1.225 billion zlotys and flagged more acquisitions.

“The rights offering is one of the key elements of this transaction, which in turn is an important step in the implementation of our strategy to actively participate in the consolidation of the Polish banking sector,” Alior’s CEO Wojciech Sobieraj said in a statement.

PZU plans to build Poland’s fifth-largest bank through Alior, which will raise its assets to 60 billion zlotys and move to the No.9 spot by assets with the BPH buy.

The lender wants to finalise the purchase this year, marking its largest takeover since it was forged from scratch in 2007.

The proceeds from the issue, led by BZ WBK, Goldman Sachs International and J.P. Morgan Securities, will fund the one-off integration costs of BPH, incurred mainly in 2017, and strengthen Alior’s capital ratios.

PZU already said it wanted to participate in the rights issue to maintain its Alior share. ($1 = 3.7497 zlotys) (Reporting by Adrian Krajewski; Editing by Agnieszka Barteczko and Kim Coghill)

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