On January 26, 2018, CEELM reported on a joint investment by Banca Transilvania and the EBRD to acquire more than 66% of shares in Victoriabank, the third largest bank in the Republic of Moldova. Bogdan Plesuvescu, the Executive Director and Chief Legal Officer for Banca Transilvania agreed to provide some insight on the transaction, which remains contingent on approval by local authorities.
CEELM: According to Banca Transilvania’s press release, “the acquisition represents the first investment in Moldova from outside the country in over ten years.” Why was the time right now?
B.P: Moldova is a border country of Romania and of the European Union where the government’s economic stabilization and structural reform programs have resulted in several notable and positive achievements, including:
- The successful completion of the privatization program
- The privatization and liberalization of the foreign trade sector
- The stabilization of the monetary system
- The introduction of full current account currency convertibility
- The implementation of national accounting and auditing standards based on international standards
- The privatization and streamlining of the banking system
CEELM: How did Banca Transilvania and the EBRD select Turcan & Cazac and Vernon David and Associates as external counsel on the acquisition?
B.P: Our decision to work with T&C and Vernon was made based on the past experience of EBRD in the country and the credentials received from multinational clients present in Moldova.
CEELM: According to the press release, Turcan Cazac advised BT and the EBRD on "trading of the shares and regulatory approvals, such as the approval from the National Bank of Moldova, and handled notifications of the deal to the Competition Council, which ultimately authorized all.” What role did Vernon David & Associates play in making the transaction happen?
B.P: Vernon David only performed a high level of legal due diligence over the target and the legal regime in Moldova.
CEELM: Will T&C and VD&A be representing Banca Transilvania on the mandatory buyout offer to the remaining shareholders of Victoriabank as well, or will you work with other firms on that process?
B.P: From a legal perspective, Banca Transilvania is not a direct party of the mandatory buyout offer. This buyout offer was launched by the majority shareholder of Victoriabank which is VB International. VBI was assisted by T&C only.
CEELM: Now that Banca Transilvania and the EBRD have a controlling stake in Victoriabank, what organizational changes can we expect to see soon?
B.P: After final approvals are received from the National Bank of Moldova, the new management team of Victoriabank will try to replicate the organizational structure and the business model of Banca Transilvania, a model which has proved to be successful in Romania.