Agreement on purchase of 89 percent of capital of Jubanka signed

Serbian Minister of Finance Mladjan Dinkic and Chairman of the Managing Board and Chief Executive Director of Alpha Bank Yannis Kostopoulos signed today at the Serbian government an agreement on the sale of 89 percent of capital of Jubanka to the Greek bank in a deal worth €152 million.

Dinkic told a press conference that Alpha Bank will pay 80 percent of the selling price on February 3, and the remaining 20 percent will be kept on a special account of the National Bank of Serbia and will be paid three months after the transfer of Jubanka shares.

According to Dinkic, the agreement specifies that the selling price may be reduced by 20 percent at most if an independent auditing firm establishes that the value of Jubanka’s capital on the day of the payment is lower than on June 30, 2004 when the tender bids were placed. He added that the selling price will not be reduced if the difference is below €4 million.

Stressing that the first privatisation of a state-owned bank has been successfully completed, Dinkic said that the agreed price is 50 percent higher than the book value of Jubanka’s capital. He added that the sale of Jubanka is the second largest investment in the privatisation process since 2001, given that only the Tobacco Industry of Nis (DIN) was sold at a higher price than Jubanka.

Minister Dinkic explained that out of the 86 percent of Jubanka’s capital that was sold to Alpha Bank, 82.69 percent was state-owned and 5.96 owned by Jubanka. The remaining 11.36 percent of shares of Jubanka are held by small shareholders.

According to Dinkic, Alpha Bank committed not to lay off any of 1,328 employees of Jubanka over the next three years and to extend an offer to small shareholders to buy their shares under the same conditions within next six months.

The Minister of Finance stressed that this year’s budgetary deficit, projected at 20.5 billion dinars, has already been covered by budgetary reserves carried over from last year and that the funds from the sale of state capital in Jubanka will be injected into the budget.

According to his estimates, direct foreign investment in the first quarter will stand at around $600 million, and it is expected to rise to $1.5 billion or $2 billion by the end of the year.

Chairman of the Managing Board and Chief Executive Director of Alpha Bank Yannis Kostopoulos said that Alpha Bank assessed that Serbia has great potential for economic growth and successful banking operations. Through the purchase of Jubanka, which has 90 branch offices, Alpha Bank significantly increased its presence in the southeastern European market.