Azerbaijan’s Finance Ministry reveals its stance on participation in additional capitalization of BSTDB

The Black Sea Trade and Development Bank (BSTDB) has offered Azerbaijan to take part in the additional capitalization of the bank, Azerbaijan’s Finance Ministry told Report.

On October 1 this year, at an extraordinary meeting of the BSTDB Board of Governors, a decision was made to increase the bank’s subscribed capital. The decision was taken by a majority of votes, in particular, with the support of the bank’s largest shareholders - Turkey, Russia and Greece. During the voting, some shareholders (including Azerbaijan) with fewer shares and, accordingly, votes, abstained.

According to the decision, the bank’s subscribed capital is increased by 816 million euros, from 2.3 billion to 3.1 billion euros, and each member state is invited to participate in the capital increase of the BSTDB in proportion to the current share in the bank’s capital. The paid-in portion of the newly subscribed capital will be 30 percent, with 70 percent callable - in line with the bank’s current capital structure. As a result of the new subscription, the Bank will receive an additional capital of 244.96 million euros. The subscription process will be finalized by the end of September 2022, and the BSTDB shareholders will make the subscribed capital payments in eight installments during the period of 2023-2030.

BSTDB offers Azerbaijan to increase its participation in proportion to the existing share of 5 percent. In this case, the country is expected to pay out 12.31 million euros in equal installments over eight years (1.539 million euros per year). During this period, discussions will be held in accordance with the legislation of the country, and the bank will be informed of the final decision.

Currently, the bank’s authorized share capital is 3.45 billion euros, the subscribed capital is 2.289 billion euros, and the paid-in capital is 0.687 billion euros.

The BSTDB is an international financial institution established by Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey, and Ukraine. The BSTDB headquarters are in Thessaloniki, Greece. BSTDB supports economic development and regional cooperation by providing loans, credit lines, equity and guarantees for projects and trade financing in the public and private sectors in its member countries. The authorized capital of the Bank is EUR 3.45 billion. BSTDB is rated long-term “A-” by Standard and Poor’s, “A2” by Moody’s.

The bank’s portfolio in Azerbaijan on 37 projects is 482 million euros.