Erste CEO Wants To Postpone BCR Listing

• How will the BCR privatization contract be amended, if ever?

Marian anton

The listing of Banca Comerciala Romana (BCR) on the Bucharest Stock Exchange (BSE) is becoming ill-timed considering the current conditions on the capital market, but a decision to postpone the listing would have to be based on an amended privatization contract. The privatization contract currently in force stipulates that BCR must be listed on BSE within three years from the completion of the privatization process, which is this Autumn. The contract also stipulates that, should the listing fail, the procedure must be resumed within a year.

Erste Bank CEO Andreas Treichl believes that the listing of BCR should be postponed until market conditions improve. The existing poor conditions on the capital markets would make any listing decision quite ill-timed. Treichl is confident that the State Asset Recovery Authority (AVAS) will understand the need to postpone. However, the matter of amending the privatization contract remains valid.

Erste Bank CFO Manfred Wimmer stated that, considering the negative condition of the capital market this year, listing a bank would be the wrong choice to make. Wimmer added that BCR"s decision to postpone the listing was also supported by the five financial investment firms (SIFs), who are shareholders in the bank. "We have had a very good relationship with the SIFs and we want to reach a shareholder agreement on the decision to postpone the listing," Wimmer said, quoted by NewsIn. Although the timing is bad and the decision to postpone seems correct, Manfred Wimmer added that Erste had not yet discussed it with the Romanian authorities.

• Mihai Fercala: SIF3 is not interested in having BCR listed

Mihai Fercala, CEO of SIF Transilvania (SIF3), supports Erste in the decision to postpone the listing because now "it would be very difficult to sustain an IPO price above the price paid by Erste upon privatization." "Practically, SIF3 has no interest in having BCR listed now and I believe that neither does Erste. The contractual provision about the listing concerns the SIFs and Erste Group. An agreement will probably be reached to postpone the deadline," Fercala told BURSA.

While everyone seems to agree on the need to postpone the deadline, how will the BCR privatization contract be amended and especially when? "I do not know what manner the Erste and AVAS lawyers will agree upon in order to change the contractual deadline, but the important thing is that now is not the time to list the bank," Fercala added.

• BCR listing, a step forward for the Bucharest Stock Exchange

National Securities Commission (CNVM) Chairperson Gabriela Anghelache in early February told BURSA that she had no information about a possible listing of BCR. In her opinion, such move would evidently revitalize the capital market. The impact of listing BCR would be quite positive for the Bucharest Stock Exchange, while investors would have the opportunity to trade shares in the largest bank on the local market.

"The important thing is not to give up on the listing," said BSE President Stere Farmache. He added he was certain that market conditions would improve. BCR reported Y2008 net earnings after taxes and the disbursement of minority interests in the amount of 2.03 billion RON (541 million EUR), up by 119.8% from the previous year. Excluding casual earnings from the sale of minority interests, BCR"s net earnings amounted to 1.29 billion RON (348.8 million EUR) after taxes, up by 39% year-on-year. BCR is nearly 70% property of Erste Group. The five financial investment firms hold 6% each.