IFC approves EUR 30 mln loan for Ukrgasbank with option to convert into up to 20% bank’s equity share

The International Finance Corporation (IFC) from the World Bank Group has approved the provision of a five-year EUR 30 million loan to state-owned Ukrgasbank with an option to convert into up to 20% equity share of the bank.

IFC said that its board approved the decision on November 11. At present, the signing of the required documents is being prepared.

IFC said that the tenor of the loan of up to five years with a bullet repayment. The option to convert the loan into the bank’s equity will be at IFC’s full discretion.

Ukrgasbank on November 25, 2019 will hold an extraordinary general meeting of shareholders to approve a loan agreement with IFC, the obligations of which can be converted into equity share. According to the draft decision, the shareholders also plan to authorize the bank council to approve other conditions of the loan agreement.

In November 2017, Ukraine’s Finance Ministry decided to cooperate with IFC in the framework of privatization of Ukrgasbank. The memorandum of cooperation also provided for the possibility of IFC entering the bank’s capital to support its sale. It was planned that IFC would enter the bank in 2018, but then this date was postponed.

JSB Ukrgasbank was established in 1993. The state represented by the Finance Ministry owns 94.94% of the shares of the financial institution.

According to the National Bank of Ukraine (NBU), on July 1, 2019, Ukrgasbank was fourth in terms of total assets (UAH 94.036 billion) among 76 banks operating in the country, and at the beginning of the year it occupied about 5% of the market.

IFC said that the bank has wide presence in Ukraine, with 23 Regional offices, 248 branches and 4,250 employees, servicing 1.9 million customers

Source: Interfax