Kyiv, 22 December 1997 (RFE/RL) -- The European Bank for Reconstruction and Development (EBRD) has become a 20 percent shareholder of VABank, Ukraine's fifth-largest, but has yet to actually put forward any money for the acquisition.
"We're still negotiating the actual size of our commitment," said EBRD resident representative Jaroslav Kinach at a recent press conference announcing the purchase.
The EBRD took ownership last week of six-million shares, nominally valued at one-dollar per share, of VABank's latest $30-million share stock offering. The agreement marks the first time the EBRD has become a shareholder in a Ukrainian bank.
VABank President Serhiy Maximov said the EBRD "is now a real shareholder and our business partner." Maximov said he expected the eventual value of EBRD participation in VABank to exceed $30 million -- meaning the bank's capital level should double.
Maximov and the EBRD's Kinach also signed an agreement giving VABank a $5 million dollar credit line.
RFE/RL reports from Kyiv that those involved emphasized their view that the deal means hope for Ukraine's financial future.
VABank was the first Ukrainian bank to meet the EBRD's rigorous criteria, said Kinach. This, he added, "is a decisive step."
Ukraine capital market newcomer Ventura, a London-based investment firm, also announced that it had taken a $1.5-million share stake of the same offering, becoming a 5 percent owner of VABank.
"We believe that economic growth here is just around the corner," saidVentura Director William Drahan.
Drahan and others hailed the deal between the EBRD and VABank as a sign that the banking sector in Ukraine is building solid foundations.
"We believe (the deal) will help attract foreign capital to Ukraine," said Oleg Taranov, the Chairman of Parliament's Finance Committee.