Banca de Economii for sale: IMF’s condition

Till the end of this month, the Government is to announce a new tender to select an advisor to privatize “Banca de Economii” (BEM). The commitment is envisaged in the Memorandum of Economic and Financial Policies (MEFP) for 2008, after the revision of which, on March 12, the Executive Board of the International Monetary Fund (IMF) decided to disburse a new loan of USD18.6M, Info-Prim Neo reports. The Government intends to speed up the sale of BEM to a strategic banking investor. The document signed by Prime-Minister Vasile Tarlev reads that „Our previous plan to perform an independent valuation of the bank prior to bringing it to market has stalled due to unwarranted demands by the selected evaluation advisor.” Till the end of September, the Government will sign the contract with the tender winner, which will have “a 6-month timeframe for bringing BEM to market.” The Memorandum stresses that "in the meantime, the Government and the National Bank will continue to abstain from granting preferential treatment to the bank, including as regards taxation.” The former IMF resident to Chisinau, Mark Horton, said back in 1999 that “BEM should not be looked at as a pocket bank of the state.” The present permanent resident, Johan Mathisen, said last fall that the BEM topic is a special one in the IMF’s talks with the Moldovan Government, but added that “the sale should not be hasty, it’s important that the privatization shall be done well and correctly.” Under the Memorandum of Economic and Financial Policies, evaluating Banca de Economii was to finalize as late as by the end of 2007, yet, after the company Deloytte&Touche, having won the evaluation tender, showed interest to participate as an intermediary in the privatization of the Moldovan bank, the privatization process was halted. Now Moldova is building its relations with the IMF on the basis of the Poverty Reduction and Growth Facility (PRGF.) The loan decided upon on March 12 will raise to USD124.7M the sum of the credits granted under the Facility, approved of on 5 May 2006 for a three-year term. Later in 2006, BEM assessed its resources and assets at 22.77B lei, reporting a rise of 27 per cent, as compared to 2005. The state holds 56.1% of BEM’s stocks, 40.97% belong to legal entities and 2.64 per cent – to natural entities.