Late last year, the RA Citadele Holdings LLC company, which is a subsidiary of the government-approved Citadele Bank investor Ripplewood Advisors LLC, submitted documents to the Finance and Capital Markets Commission (FCMC) to receive authorisation for its substantial participation in the shareholder structure of the bank. According to the share purchase agreement that was signed on November 5, 2014, RA Citadele Holdings LLC and a group of international investors want to take over all of the state’s shares in the bank – 75% of shares minus one share.
The FCMC uses five essential criteria that are indicated in the law about ensuring careful evaluation of investors – availability of free capital, financial stability, the legality of resources used for the investment, the reputation of the investor, and a business plan that reveals the investor’s views and strategy about the bank’ s future work.
A unified oversight mechanism that took effect on November 4, 2014, states that all essential decisions related to the oversight of European banks are taken by the relevant government institutions in partnership with the European Central Bank (ECB). For that reason, the FCMC and ECB experts will spend the next few weeks in evaluating the aforementioned documents. Then the FCMC will prepare its conclusions and submit them as a proposal to the ECB in terms of what to do. The ECB will be able to take a decision on issuing or not issuing the authorisation. The plan is to take the decision by March 26, with information about it being made public.
The evaluation of potential investors is ensured for any lending institution, and before a new investor can become fully involved in the bank’s operations and vote on the basis of the shares that have been purchased, authorisation for substantial participation must be received from the oversight institutions. The law says that the evaluation must be completed with 60 business days’ time after all of the relevant documents are received.