CR Firenze cuts capital to outweigh loss

CR Firenze has cut its capital by 70% to 43 million lei, from 143.6 million lei, in an effort to recoup the losses it suffered in 2007, 2008 and 2009 fiscal years.
Shareholders of the bank approved in the shareholders’ general assembly from May 25, 2010, the reduction of the face value of each share by 7 lei, from 10 lei to 3 lei.

Thus, the bank’s subscribed and paid capital of 143.62 million lei will be reduced by roughly 100.54 million lei, of which 99.16 million lei represent the losses recorded in 2007, 2008 and 2009 fiscal years, while 1.38 million lei represent the difference between the roundoff of the face value reduction of each share from 6.903855102 lei to 7 lei. The amount (1.38 million lei) will be registered in a special reserve of the net patrimony.

After the capital-cutting measures complete, the bank will have a capital of 43.09 million lei.

The plan comes after a 35% hike to 143.6 million lei in a 37.2 million lei rights issue. Prior to the hike, the bank had 106.4 million lei common capital.

Initially, the shareholders of CR Firenze Romania decided in a general assembly to raise the capital by 40.4% to 149.4 million lei, by issuing 4.3 million new shares with a face value of 10 lei. The board decided to annul the remaining 578,823 shares.

After the raise, Cassa di Risparmio di Firenze had 88.4661% stake, Fingen International BV - 2,7340%, Rosentrade Investment Ltd – 0.8719%, Leonard Finance SA – 1.2662%, and Giovanni Andrea Innocenti – 6.6618%.

CR Firenze Romania, former Daewoo Park became part of the namesake banking group in March 2006 after the transfer of the majority stake to Italy-based CR Firenze. In October 2007, the Competition Council gave the green light to the indirect takeover of CR Firenze Romania by Intesa Sanpaolo.

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