Kardan NV (TASE: KRNV;AEX:KARD) is exploiting the economic crisis in Ukraine to increase its financial activity in the country. Kardan's Dutch subsidiary TBIF Financial Services BV (TBIF) has signed an agreement to acquire an additional 35% of Ukraine's VAB Bank from its partner Sergei Maximov for €24.2 million. When completed, TBIF will increase its stake in VAB Bank from 63% to 98%.
VAB Bank is the 23rd largest of Ukraine's 165 banks. It has 150 branches nationwide, but has been battered by the country's economic crisis and required a €93 million capital injection from the National Bank of Ukraine, which has been fully utilized.
Clal Finance Brokerage analyst Aviran Revivo said, "If the deal is closed, Kardan's exposure to VAB Bank will be €81 million, and it will be impossible to ignore the company's higher risk profile caused by its exposure to this hemorrhaging Ukranian bank. Kardan believes in its Ukranian financial businesses and it is now injecting cash into them."
Kardan's share fell 4.2% in Amsterdam today to €4.34. The share fell 5.4% on the TASE to NIS 23.12, giving a market cap of NIS 2.32 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on January 12, 2010
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