Romanian investor sells 25% of his bank to American fund JC Flowers

Romanian investor Ilie Carabulea and several other shareholders of local lender Banca Carpatica have agreed to sell a 25% indirect stake in the bank to American investment fund JC Flowers. The value of the transaction was not disclosed. JC Flowers, an private investment firm managed by former Goldman Sachs executive J. Christopher Flowers, has also expressed interest to underwrite Carpatica’s ongoing share capital increase, which would help it take control of the Romanian bank. Banca Carpatica will double its share capital by issuing 1.1 billion new shares to attract about EUR 25 million from its shareholders. Most shareholders won’t probably participate in this operation, as the offer price is 2.2 times higher than the price for which the shares are trading on the Bucharest Stock Exchange, which is currently RON 0.0453 per share (as of September 8). JC Flowers has shown interest to subscribe the remaining amount in a private placement, after the shareholders get the chance to exercise their right to participate in the capital increase, according to Banca Carpatica’s reports. Romanian businessman Ilie Carabulea and his partners, who founded Banca Carpatica in 1999, will still hold minority stakes in the bank after these operations. Banca Carpatica had EUR 3.37 million losses in the first half of 2015, as its net revenues went down by 40%, to EUR 13 million. The bank’s total assets were EUR 730 million, but the net loan portfolio was only EUR 225 million while the rest of its resources were invested in state bonds, real estate assets, or placed in minimum reserve accounts at the central bank. Carpatica had over EUR 630 million in deposits from customers, as of June 30, 2015. Carpatica’s shareholders equity was only EUR 43 million, and the capital ratio was 8.1%. JC Flowers plans to buy another bank in Romania, possibly Greek-owned Piraeus Bank, in order to create a top 10 banking group, according to Romanian media. Romanian Banca Comerciala Carpatica reduces capital by half Former Goldman Sachs manager’s fund, in race for Romanian Banca Carpatica US investment fund interested in one of Romania’s smaller banks editor@romania-insider.com