The European Bank for Reconstruction and Development (EBRD) is set to raise its stake in Russia’s Transcapitalbank to up to 28.6% after signing an agreement to subscribe to a new issue of ordinary shares by the end of 2009 aimed at boosting its Tier-1 capital.
The transaction, through which this mid-sized bank is raising over $43m from its existing shareholders, will both strengthen its capital base and enhance its competitive position at a time when the country faces an economic downturn.
This new transaction will bring the total amount of facilities provided by the EBRD to Transcapitalbank to $166m since 2004. EBRD funding over the past five years has included subordinated debt, credit lines for micro, small and medium-sized businesses, trade finance facilities, mortgage lending and equity capital.
Transcapitalbank focuses on medium-sized corporates, as well as micro and small businesses, across the regions of Russia, and the new funding will allow this long-standing partner of the EBRD to increase its support for its core client base in the real sector of the economy.
