June 20, 2018 / 2:49 PM / 3 months ago

EBRD approves consortium bid for stake in Moldova's largest bank

KIEV, June 20 (Reuters) - The European Bank for Reconstruction and Development (EBRD) on Wednesday said it would take part, together with two private equity firms, in an auction to buy a 41.09 per cent stake in Moldova’s largest commercial bank.

Following a $1 billion banking fraud that nearly bankrupted Moldova in 2015, the government launched an overhaul of the banking sector, including the cancellation of 42 percent of shares in Moldova Agroindbank for subsequent reissue.

The shares have been put up for sale several times, but have not until now found a potential buyer.

“The EBRD, at its Board of Directors meeting today, approved the Bank’s participation, together with private equity firms Invalda and Horizon Capital, in an upcoming auction for the acquisition of a 41.09 percent stake,” the EBRD said in a statement.

Earlier in June, Moldovan central bank Governor Sergiu Cioclea told Reuters the regulator had given an international consortium of investors, which included the EBRD, its approval to bid for the shares in Moldova Agroindbank.

Vilnius-based Invalda is a leading asset management group in the Baltics, while Horizon Capital manages funds which provide financing to businesses in Ukraine and Moldova.

In March, the International Monetary Fund, which supports the former Soviet republic with a $183 million loan programme, said the government had made some progress addressing vulnerabilities in the banking sector.

In 2015, Moldova’s negotiations with the IMF and the European Union on funding were disrupted when it emerged that the equivalent of one-eighth of national output had disappeared from the banking system, triggering an economic and political crisis.

As of end-2017, Moldova Agroindbank had assets worth 1 billion euros ($1.16 billion) and equity of 180 million euros. ($1 = 0.8636 euros) (Reporting by Alessandra Prentice; Editing by Jan Harvey)

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