May 8 (Bloomberg) -- Raiffeisen Zentralbank Oesterreich AG, the owner of Raiffeisen Bank International AG, plans to raise as much as 1.4 billion euros ($1.8 billion) in a rights offering that may exceed the needs for a planned capital swap.
RZB, which is 89 percent owned by eight Austrian regional cooperative banks, will use most of the proceeds to cover a 840 million-euro capital swap designed to help it meet capital requirements by the European Banking Authority, it said April 20. RZB is canceling so-called participation capital that’s not recognized by the EBA and redeeming it with the funds raised in the share sale, effectively swapping one for the other.
The possible excess proceeds are “due to technical reasons and reasons of stock law” and may not be entirely taken up by shareholders, Gregor Bitschnau, an RZB spokesman, said in an e-mail.
RZB and Raiffeisen, which operates in Austria and in 15 former communist countries, are filling a 2.1 billion-euro capital gap found by the EBA, which was exacerbated by losses in Hungary last year. The lenders have addressed most of the shortfall by reducing risk-weighted assets, and by making capital EBA-compliant.
At the same time, RZB and its owners have resisted a share sale at publicly traded Raiffeisen, of which they own 78.5 percent, to help raise capital. Such a deal isn’t planned “in the near future” while it remains an option, Michael Palzer, a Raiffeisen spokesman, said in an e-mailed response to questions.
Uniqa Cash Call
While it denied a share sale to Raiffeisen, RZB is underwriting a 500 million-euro cash call at insurer Uniqa Versicherungen AG, of which it owns 45.7 percent, Uniqa said last week.
The bank’s shareholders, led by Raiffeisenlandesbank NOe-Wien AG and including Oesterreichische Volksbanken AG, can subscribe to two new shares for every 11 they own, or as many as 1.1 million new shares at 1,270 euro apiece, according to a regulatory filing in Austria’s official gazette today. The subscription period ends May 22, and the new shares will be issued by June 1.
RLB NOe-Wien holds most of the participation capital after it bought an extra 340 million euros at the end of last year. That was due to a deal in which it sold minority stakes in Raiffeisen’s Czech and Slovak units to Raiffeisen to clean up the shareholder structure.
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