“Erste Group Bank AG set the final rights issue price at €29.00/share in the context of a capital hike at market. The gross revenues from the rights issue stood at €1.74 billion” the bank said in a release.
The Austrian-based bank said the capital increase would lift its pro forma core Tier 1 ratio.
“We are delighted by the solid demand from institutional and retail investors”, said the chief executive of the lender, Andreas Treichl.
“Central and Eastern Europe is still seen as a region with significant growth opportunities, and we are well-positioned to benefit of these growth prospects in the region”, he added.
Erste said the rights issue was closed on Monday, one day earlier than planned, due to the strong demand. The group will announce in the coming days the price of the subscription and the new ownership structure.
“At this point, the rights issue is closed. Shares have been subscribed by existent shareholders who exercised their subscription rights but also by other investors. Existent shareholders have subscribed 62% of the shares available, while other investors subscribed 38% of the shares”, said Ionut Stanimir, spokersperson of Erste Group.
“In the coming days, the bank will announce the subscription price and the new ownership structure, after all processes are closed and approved by regulators”, Stanimir added.
Analysts had anticipated the success of Erste’s offer, citing “the operating stability the bank enjoys”, which reflected in the investors’ interest. Wood & Company’s Peter Vidlicka said the success of the rights issue was predictable, as Erste shares are fundamentally pretty cheap, with a trading price near the face value of the shares, compared to its CEE peers.
“I think there is a high interest for Erste shares due to its undervaluation at the stock market. If the capital increases after the rights issue, the bank will grow stronger from a structural perspective, and many investors will see the capital raise as a positive factor, as the bank will have enough resources to support lending and this would help it get back on the uptrend”, Peter Vidlicka told NewsIn.
The bank said in the press release that the existent shareholders subscribed 62% of the new shares in the rights issue, including shares placed by Criteria CaixaCorp, while the remaining 38% equities will be placed in the Global Offer.
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