Company court refuses to register FHB capital raise

Initiatives

The Company Court on Wednesday refused to register a capital raise by FHB Bank, which the bank’s board decided on December 28, based on an attached permission by the National Bank of Hungary (MNB) dated long before, Hungarian news agency MTI reported yesterday.

However, FHB said it considered the problem merely a technical one and was confident it could be resolved soon, MTI cited an announcement by the bank issued yesterday.

The Company Court took the view that the permission of the central bank could not relate to the December capital increase as it was issued much earlier, in September 2014, MTI reported. The court added that while no regulation specified a deadline for the validity of such permissions, they cannot be considered indefinitely effective, MTI said.

The new FHB shares were subscribed by 30 savings cooperatives and Takarékbank, their "central bank", giving the group a stake of almost 30%, MTI reported.

Existing shareholders, including the Hungarian state with a 7.32% stake before the capital raise, were excluded from the subscription as they no longer possessed pre-emption rights as a result of a shareholders’ resolution approved in the spring of 2014, MTI noted. On behalf of the state, MNV said on December 30 it would turn to the court for being excluded, along with other small shareholders. A week later FHB announced it would offer newly issued shares to the state. Hungary’s Prime Minister Viktor Orbán deemed FHB’s move an “unfriendly, even hostile step, a mistake the bank must correct” on January 8, during his regular biweekly radio interview.

Takarékbank and 30 savings cooperatives subscribed the new shares at 717% of nominal value on December 28, MTI said, adding that FHBʼs registered capital rose from HUF 6.6 billion to HUF 10.849 bln through the capital raise with HUF 26,217 bln going into capital reserves.

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