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Resuming Azerbaijani Parex Leasing& Factoring depends on negotiations with its founder’s syndicates

Business Materials 16 February 2009 17:10 (UTC +04:00)

Azerbaijan, Baku, Feb. 16 / Trend , N.Ismayilova/

To resume the Azerbaijani Parex Leasing & Factoring company's financing new projects depends on negotiations with its founder's - Latvina Parex Bank's syndicates, the bank's Azerbaijan Office Head Andrace Krivans said.

A total of 60 banks are syndicates which granted money to the Latvian bank and a loan repayment term was scheduled for Feb. 21.

"At present we are examining two version of repayment," Krivans said. "First, which is more favorable for the bank, is repaying 20 percent of loans at the moment and 80 percent in three years."

If a problem is solved under these conditions, Parex Bank will have money to finance loaning and leasing activity, he said.

"The second version examined by the government is repaying 40 percent at the moment and 60 percent un two years," Krivans said.

Krivans said that Parex Bank can pay all its debts to creditors, even if they demand full repayment in 2009. True, it can affect the bank's further activity.

"The more the bank pays now, the more money will remain to resume its activity and surely, the Azerbaijani Parex Leasing & Factoring's activity depends on it, as well," Krivans said.

Parex Leasing & Factoring Limited Liabilities Company (LLC) suspended financing of new projects due to the influence of the global financial crisis in December 2008. At present, company continues functioning with the previous projects.

In November Latvia made a decision about acquisition of control packet of shares in the capital of Parex Bank in order to save it from bankruptcy. The packet with 51 percent shares of bank acquired by government will be transmitted to the belonging state of "Latvijas Hipotеku un zemes banka".

However, on Dec. 3 the decision to take 84.83 percent shares of bank under control was made at the special session of government. Government assumed guarantying of syndicated credits of bank.

Parex bank is the largest bank in Latvia. According to the data to the end of April 2008, it occupied the first place in the republic by the volume of drawn investments with market share of 19.8 percent and by second place due to shares with market share of 14.4 percent.

Parex Leasing and Factoring conducts its activity since March 2005. Parex Bank's leasing companies operate also in Moscow, St.Petersburg, Kiev, Minsk, Tallinn and Vilnius. The authorized capital of bank is paid to $50,000. The leasing portfolio of company to the beginning of August was $46.9 million.

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