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Erste’s Main Owner May Sell 150 Million Euros of Shares in 2012

Erste Stiftung, the foundation that owns 24.8 percent of Erste Group Bank AG, may sell 150 million euros ($183 million) of shares this year to pay off debt, Erste Stiftung said in its annual report.

The foundation has to repay 250 million euros of debt in December, according to the report published on its website. It plans to raise 100 million euros through a privately placed bond and cover the rest with a sale of shares. At yesterday’s closing share price, that would equal a 2.6 percent stake in Erste Bank.

“The board has decided in principle not to roll over the remaining liabilities of 150 million euros, but rather to raise an appropriate amount to pay it back by selling stock in Erste Group Bank,” according to the report. Erste Bank Chief Executive Officer Andreas Treichl is Erste Stiftung’s chairman.

The foundation’s annual report was published mid-May, Erste Bank spokesman Michael Mauritz said by telephone today. He declined to say whether Erste Stiftung had already sold shares. Austrian weekly Format first reported the foundation report in today’s edition.

Erste Stiftung was created in 1993 and has been the biggest shareholder of Erste Bank since. Among the foundation’s aims is “to secure Erste Group Bank’s independent future as its principal shareholder,” according to its most recent bond prospectus. The charitable foundation also funds social and art projects in Austria and eastern Europe.

Erste Stiftung had debts of about 1.18 billion euros at the end of 2011, according to the report. Its main revenue source is dividend payments from Erste Bank, which last year amounted to 67 million euros. That will be lacking from the foundation’s cash flow and revenue in 2012 because Erste Bank skipped the dividend for the 2011 business year. It expects to resume dividend payments for this current year.

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