Azerbaijan, Baku, Aug. 24 / Trend I.Khalilova /
The European Bank for Reconstruction and Development (EBRD) has once again demonstrated its readiness to provide advisory support to the non-banking loan organization Agrarcredit. The EBRD planned to join the shareholders of the organization, but the relevant talks were suspended by the force of the global financial crisis in 2008, the loan organization said on Aug. 24.
Experts of the EBRD held a meeting on Aug 24 at the loan organization and proposed a new project to support Agrarcredit's activities in its transition to European standards.
The previous project on technical assistance to the sustainable development of Agrarcredit ended in 2008 but the EBRD is now ready to sanction a new project. However, the issue of purchase of equity interest is still to be discussed, the same source said.
The EBRD may hold consultations with the loan organization's management on instructions related to expanding the authority of its regional offices and in general, adjusting Agrarcredit's activities to European standards.
The bank, along with other financial institutions, intended to help in restructuring and privatizing Agrarcredit. The bank held preliminary talks with Agrarcredit's management on participating together with a strategic partner, but with the smallest equity participation.
Earlier the head of the EBRD Baku office Francis Dale said that the participation of the foreign strategic investor in the project seems impossible in the nearest future in view of the current financial crisis. So, plans on the purchase of EBRD's shareholding in Agrarcredit must be reconsidered.
EBRD took an interest in purchasing a 25 percent package plus stock in the Azerbaijani non-bank loan organization. However, due to change of this plan the bank is ready to find new ways of cooperation in the agrarian sector.
The International Finance Corporation and German Bank KfW also show an interest in participating in the country's agricultural bank. The decision of these financial institutions depends on EBRD, which in similar projects always shares the risk in cases of participation (joining shareholders), Chairman of Agrarkredit's managing board Mammad Musayev, said on Aug. 24.
In a recent meeting with KfW representatives the readiness in this question was also expressed, but with the joint participation of the EBRD, Musayev added. In addition, these strategic financial institutions are holding similar negotiations with the Government and the Central Bank.
At present, the loan organization is operating upon a limited license. The government will continue its capitalization like in the cases of other state banks - the International Bank of Azerbaijan and Kapital Bank (its privatization completed in June)
"Presently, there is uncertainty regarding the terms of Agrarcredit changing its status. The State Committee on Property Affairs and the Finance Ministry are the plenipotentiary agencies privatizing our loan organization," Musayev said.
Agrarcredit's major shareholder is the Azerbaijani Finance Ministry, which owns 99.9 percent of the loan organization's stocks. The rest were equally distributed between the Azer Sigorta state insurance organization and the Melioration and Water Resources OJSC. At present, the loan organization's capital is 18 million manat, which exceeds the requirements for bank capitalization, which the Central Bank established at 10 million manat.
On Aug.24, the official exchange rate is 0.8039 manat to $1.
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