“As we announced a few years ago there is a strategic plan to expand Patria Credit towards banking operations. (…) We are working on this strategic expansion. The process of turning Patria Credit into a bank is no longer allowed by banking legislation at the moment, but one can talk about a potential acquisition,” Manda told ZF in an interview.
At present RAEF and BAF hold 99.9% in Patria Credit. The shareholders have sought to get a banking license in the past as well, but central bank BNR did not grant the license. The portfolio of RAEF included two banks in the past (Banca Romaneasca and Banca Agricola).
“We are talking about a potential expansion of Patria Credit operations through the funds we manage, and later other financial investors could join in. Unfortunately for the Romanian economy there are a lot of such acquisition opportunities. The level of investment required for such an expansion strategy is in the range of tens of millions of euros.”
Manda did not wish to say what banks he was in talks with.
ZF recently wrote, citing banking sources, that at least three small banks on the market – Romanian International Bank (RIB), Marfin and Nextebank – could change their majority shareholder in the coming months, with the current owners being in a more or less advanced stage of the sales process. The list of banks that could change their majority shareholder also includes Banca Carpatica.
Manda says Patria Credit has had a good performance, but growth has not been big because the board of directors did not seek major growth, which would have meant similarly high risks.
Manda’s funds also include stakes in businesses such as transport and logistics company Edi International Spedition (in which he invested in 2005 and which is now insolvent), equipment rental company Industrial Access (2007), Frigotehnica (2008) in the refrigerating equipment industry, toy company Noriel (2010), and others.
Edy International Spedition last year had a turnover of EUR47 million, down 37% on the year before, Frigotehnica ended last year with sales of EUR10.3 million, 3% lower in euros against 2011, and Industrial Access reported turnover of EUR7 million, down 9%, according to Finance Ministry data.
“As investors who are seeking to use loans in our companies, I can confirm that it has become extremely complicated to get financing from a bank, even for investors with a certain track record and history with the bank,” Manda also says.
In the past the funds run by Horia Manda exited businesses such as Banca Romaneasca (in 2003), Ralfi/Estima Finance, Motoractive, Domenia Credit (2006), Domo (2007) and Policolor (2008), selling the holdings to giants such as General Electric and Raiffeisen.
Talks over three potential transactions
Manda says at the moment talks are ongoing for three potential transactions, two of which target the majority stake. Sectors of interest for the funds are construction materials, financial services and IT.
“There were at least two situations where we signed agreements with local entrepreneurs, which could not become transactions because of creditors’ opposition. The situations where banks accepted more creative solutions are very few.”
(English version by Daniela Stoican)