Hearts Owner Romanov’s Ukio Bankas Shares Fall on Arena

AB Ukio Bankas, the Lithuanian bank controlled by Edinburgh soccer club Heart of Midlothian Plc owner Vladimir Romanov, fell to an eight-year low on the Vilnius exchange, losing a quarter of its value in a month.

The shares fell as much as 12.4 percent today, closing down 7 percent at 0.12 euros ($0.15), the lowest since Oct. 28, 2004, according to data compiled by Bloomberg. Volume of 766,022 shares was 11 times the three-month daily average. The shares have lost 24.5 percent since Oct. 10.

The decline began after the bank reported a nine-month net loss on Oct. 29, and accelerated on Nov. 6, when it said it took over a Lithuanian sports arena developer from debtors. Swedbank changed the shares to ‘no recommendation’ from ‘buy’ on Nov. 9, citing a lack of information about the effect of the arena transaction. Romanov owns 64.9 percent of Ukio Bankas (UKB1L) shares, according to a note in the bank’s earnings report.

“Investors really question the valuation of that property developer, which is a big part of the bank’s assets, and so they don’t know how much its equity may be worth now,” Finasta investment bank analyst Tadas Povilauskas said by phone. “And if Romanov hasn’t rescued his soccer club and hasn’t increased the share capital of Ukio Bankas as was planned some time ago, it probably means he just can’t find the money.”

Tax Debt

Heart of Midlothian, which identifies Romanov as principal shareholder on its website, said there on Nov. 7 that it had been issued with a winding-up order by a Scottish court due to overdue tax payments of 449,692 pounds ($714,155). The club is asking fans to buy shares and tickets in order to help it avoid bankruptcy, according to an open letter its website.

Kaunas, Lithuania-based Ukio Bankas’s spokeswoman Aukse Glodiene said no one was available today to comment on the share performance.

Ukio Bankas said on Oct. 29 that Arnas Zalys, a former deputy chairman, was replacing Gintaras Ugianskis as chairman of the board and chief executive officer. Today the bank said in a regulatory filing that two current board members and employees of the bank were named deputy chief executives.

The bank’s shares were the most active by volume on the Nasdaq OMX Vilnius exchange today. The OMX Vilnius stock index fell 0.2 percent to 341.49, the lowest in almost four months.

To contact the reporter on this story: Bryan Bradley in Vilnius at bbradley13@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net; James M. Gomez at jagomez@bloomberg.net

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