"Bank of Cyprus" wants to buy an additional 10% of "Banca Transilvania"

• The articles of incorporation of Banca Transilvania prevent shareholders from holding more than 10% individually

Bank of Cyprus yesterday announced that it has requested the agreement of the NBR to acquire an additional 10% of the stocks of "Banca Transilvania", after buying 9.7% of Banca Transilvania on the stock exchange. The officials of "Bank of Cyprus" have already mentioned, in a communiqué posted on their website, that the Cypriot bank has already received the approval of the Central Bank of Cyprus to increase its stake in Banca Transilvania.

The management of "Bank of Cyprus" yesterday announced that subject to receiving the necessary approvals and depending on any opportunities which may arise, it is willing to raise its stake in Banca Transilvania to 20%.

The Cypriot bank"s plan depends on whether Banca Transilvania will change its articles of incorporation, which limit the holdings of its shareholders to 10%.The European Bank for Reconstruction and Development (EBRD) is the only shareholder of Banca Transilvania exempt from this rule: it holds 14.61% of the shares of TLV.

Ioan Cuzman, the chairman of SIF "Banat-Crişana", one of the founding members of Banca Transilvania, which holds 5%, said for BURSA, that so far no shareholder has asked for the amendment of the holding limit included in the articles of incorporation: "For the moment, the maximum holding is capped at 10%".

"We will see what happens and what the opinion of the other shareholders is on this matter. There were always attempts to buy our stake, but nothing came out of it".

Robert Rekkers, the CEO of Banca Transilvania, declined to comment the intention of the Cypriot bank which was announced yesterday.

The announcement of "Bank of Cyprus" only generated a short-lived rebound: yesterday, the stock of TLV closed 6% below the opening price.

Mihai Chişu, broker at "IFB Finwest", considers that the announcement of the Cypriot bank had little impact on the price of TLV shares, precisely because it is uncertain whether the raise of the holding threshold above 10% will actually happen.

"It takes concrete news to get concrete effects on the stock market. If we would have had a certain answer yesterday on what would happen with the 10% holding cap, we would have most likely seen an impact in the market. The news just caused a brief bounce, you can"t go against the wind at a time like this".

At the end of April, the shareholders of Banca Transilvania (TLV) approved a share capital increase of 391 million lei, of which 120 million lei through contributions in cash from shareholders.

Banca Transilvania has a market capitalization of 1.62 billion lei, based on yesterday"s closing price of 1.5 lei/share.