ECONOMY

Hungary’s OTP claims Albanian gov’t broke rules in bank sale

TIRANA – Hungary’s OTP said yesterday the Albanian Finance Ministry broke the rules in a tender that saw Austria’s Raiffeisen emerge as the most likely buyer of Albania’s Savings Bank, and asked to be given one more chance. Raiffeisen offered $126 million to buy Savings Bank on Wednesday after it agreed with the Albanian government’s conditions. OTP, Hungary’s largest commercial bank, refused to change its share purchase agreement, leaving Raiffeisen as the only bidder. The tender was the third attempt in as many years to privatize the Savings Bank, Albania’s most important financial institution with a 75 percent share of the local market. «We think the procedure was not according to the tender rules set by the government,» OTP deputy chief executive Laszlo Wolf told a news conference. «These elements were different from what we have seen in international practice.» Albania’s Finance Minister Kastriot Islami said the process had been very transparent and both bidders had been offered equal chances. The tender commission was meeting late yesterday to offer its view to the government, which will have the final say. The finance minister told OTP and Raiffeisen that Albania would not accept their changes to a share price agreement the government had approved and asked them to sign the contract they had been offered initially. Wolf said the two banks had been awaiting a Friday deadline to present an original, signed contract, but were instead given an hour to sign the government-approved share price contract, involving higher risks that were unacceptable to OTP. He said it was impossible for OTP to accept because it was not allowed to change its offer of $119 million in cash, while being forced to accept a contract with more risks. Raiffeisen agreed to change it to reflect the Albanian terms. Among other things, OTP had asked for a full tax indemnity for the bank’s past activity and assurances that a 10 percent advance payment would be returned in case they did not receive a license. Wolf also complained that the offer by Raiffeisen – $95 million in cash and $31 million in kind by making a Kosovo branch part of the Savings Bank – was not in accordance with the rules. «We think the government is selling the bank at too low a price. They sell at the price of $95 million,» Wolf said. «All I can say is that we expressed more hope and optimism in your country and economy by giving a significantly higher price.» He said OTP would walk out of the sale if there was no new tender, and was considering claiming compensation. «But of course, if we are given the chance to start again, we are ready to start under transparent circumstances and acceptable conditions,» he added.