WITH HIS HANDS TIED BY THE NBR Carabulea has relinquished control of "Carpatica" for 5 million Euros

Banca Comercială Carpatica (BCC) is going down the road of the merger with Nextebank, after a few other failed attempts, so far, and after resounding failure of the talks with American fund JC Flowers.

Ilie Carabulea, the biggest shareholder of BCC, has yesterday officially relinquished the control of the bank, after he sold, along with four other shareholders, 20% of the bank, for 23.1 million lei (5.1 million Euros), to Nextebank, which is 98% owned by EEAF Financial Services BV .

The deal seems to have been cooked in the offices of the National Bank of Romania, as it has removed from Carabulea and the shareholders he was acting in concert with without the right to vote in the General Shareholder Meetings, since back in 2014.

The institutional investors in the EEAF include the European Bank for Reconstruction and Development (EBRD), European Investment Fund (EIF), Black Sea Trade and Development Bank and German Fund DEG, a subsidiary of development bank KfW.

Also, Nextebank has announced that it would subscribe by the end of the year shares amounting to 98.66 million lei to the capital of Carpatica, and after that transaction they intend to again propose to shareholders the merger through absorption of Nextebank by BCC.

Following this operation, Nextebank will own approximately 55% of the capital of Carpatica, and Ilie Carabulea will be left with a percentage of 18.46%.

The merger with Nextebank has been on the agenda of the General Shareholder Meetings since back in 2014.

The reason invoked by the NBR, in the case of the suspension of the voting rights of Ilie Carabulea, was the fact that he did not meet the reputation requirements required by the Regulations of the Central Bank, in terms of integrity, as he has been sentenced to prison for offering bribes in 2012, and was subsequently a target of the National Anti-Corruption Department for offering bribes, forgery in private deeds and abetting abuse in office, in the case of "Carpatica Asig".

According to the Constitution, the right of ownership is guaranteed in Romania, but apparently not on the banking market, where the National Bank of Romania has the legal leverage to stick its nose in discussions. Nothing goes without the approval of the NBR.

Of course, the NBR didn't take the stock away from Ilie Carabulea, but under the claim that it is watching out for the safety of depositors and of the banking system, it has taken away his right to manage his business.

Also, the NBR seems to have been as involved as possible in the talks concerning the sale of the block of shares owned by Carabulea.

At the end of last year, Nicolae Cinteză, the head of the Oversight Division of the National Bank of Romania (NBR), was saying that J.C. Flowers was getting close to completing the acquisition of Banca Carpatica, an acquisition which was subject to the acquisition of Piraeus Bank România as well.

At the time, he said that the merger of the two banks could create a new bank.

In November, Mr. Cinteză warned against the possibility of the American fund abandoning the acquisition of Piraeus Bank. In an interview with BURSA, he said that one of the major obstacles to the acquisition of Piraeus Bank România seemed to be the approval of the Law of giving in payment of homes, as JC Flowers was not willing to accept the losses generated by the conversion of foreign currency loans and by the giving in payment of real estate collaterals.

On the stock market, BCC stock has reacted to any announcement concerning the deal with JC Flowers, and after the negotiations failed, the shares went into a decline.

Just before New Year's Eve, the rescue came from Nextebank. It sent BCC a non-binding offer to subscribe in the share capital increase offer, but it announced that it would want to do a thorough verification of the bank's situation.

Banca Comercială Carpatica has announced on Tuesday that it has cut its net loss to half last year, from 169.5 million lei to 85.43 million lei, and its assets have decreased 4.7%, to approximately 3.1 billion lei, according to the preliminary financial results drafted according to the IFRS standards. At the end of 2014, the Sibiu bank 3.25 billion lei in assets, and the net loss stood at 169.5 million lei. The estimated solvency ratio for December 2015 was 7%, according to the press, in other words, below the minimum level required by the NBR.

Of course, "willingly and without constraint", Carabulea has accepted "Nextebank"'s offer.