FMO to Allot Subordinated Credit to Bank Respublika
Azerbaijan, Baku / Trend corr I. Khalilova / It is planned to sign an agreement between Azerbaijan's Bank Respublika and the Holland Development Bank FMO at the beginning of September. The agreement will envisage the opening of a credit line in the sum of $13mln to the Azerbaijani bank, according to the Bank Respublika.
"The deal will be made after juridical issues are resolved, and the funds can be allotted at the end of September or beginning of October," a source at the bank said.
The credit involves two segments. Some $8mln of the credit line will be allotted for financing small-scale and middle-scale entrepreneurship in Azerbaijan, while the remaining $5mln will be allocated as a subordinated credit intended for the second-level capital of the Bank Respublika. The terms also differ depending on the destination of the credits. A subordinated credit is intended for seven years, and the credit resources of middle-scale and small-scale entrepreneurship for four years.
Bank Respublika also cooperates with FMO in accordance with the credit agreement signed in Baku on 28 August 2006. The first credit line of the Holland Bank made up $10mln and was allotted for four years.
So far Bank Respublika has received funds from the European Bank for Reconstruction & Development, the Black Sea Trade & Development Bank, Asian Development Bank, German Investment Corporation of DEG.
Under the agreements signed between Bank Respublika and leading German financial institutions on 28 April 2005, DEG (a member of KfW group of banks) and Sparkassen International Development Trust (SIDT - a member of Sparkassen-Finanzgruppe financial group) are the stockholders of the bank. They purchased the stock package of 25% + one stock.