EBRD calls Citadele sell-off ‘big success’

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The European Bank for Reconstruction and Development (EBRD) on Thursday welcomed the decision by the Government of Latvia to sell its stake in Citadele to a group of international investors led by the US investment firm Ripplewood and Tim Collins, its founder and CEO.

In a release the EBRD said that “transferring Citadele Bank into private ownership is a big success for the bank and the country.”

“Citadele Bank is a strong financial institution in one of Europe’s fastest growing economies. Its sound business model and high standards of corporate governance have now attracted a leading investor who has expressed his long-term commitment to the bank”, said Jean-Marc Peterschmitt, EBRD Managing Director, Central and South Eastern Europe.

Mr Peterschmitt added that the EBRD will “contribute to the future development of Citadele Bank by retaining our stake in the bank for the next phase of its development. We view Ripplewood as a good partner for the bank with a strategy that is consistent with that of the bank’s management and current shareholders.”

The US investment group plans to acquire the stake in Citadele Bank presently held by the Government of Latvia, while the EBRD intends to remain as a 25% shareholder in the bank.

transferring Citadele Bank into private ownership is a big success for the bank and the country"

The EBRD joined the international community’s efforts to save Latvia from the impact of the global financial crisis, when it became a shareholder in Parex Bank, then the country’s second largest lender, in September 2009. After a successful restructuring the institution was later split into Citadele Bank, established in August 2010, which was prepared for reprivatisation, while the troubled assets were transferred to the asset management company Reverta.

The Government of Latvia announced its decision on 16 September 2014 after a comprehensive and multi-tiered bidding process in accordance with international standards and EU regulation. The EU Commission had set a deadline for the privatisation of Citadele Bank by the end of 2014. According to the Government, the purchase agreement will be signed by the end of September, at which point the full names of the investors involved will be disclosed.

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