A purchase of Liberty Bank by Patarkatsishvili’s family has been delayed. This is not the first sale of the bank ended in failure. Earlier, according to reports, TBC Bank was interested in Liberty purchasing but finally refused the deal.
The deal has failed for several reasons. In particular, an unfavorable state of the bank’s assets, a dispute between the bank’s former shareholders and the bank’s extremely weak management. It became known in late May that Badri Patarkatsishvili’s family was buying Liberty Bank. CBW reported that the assets were being examined by the tycoon’s family which was represented by George Kalandarishvili and Irakli Rukhadze.
Both of them have close ties with Badri Patarkatsishvili’s family. George Kalandarishvili was General Director in Standard Bank owned by Badri Patarkatsishvili before the bank was sold. As for Irakli Rukhadze, he was the chief executive of Salford Georgia- an international private equity firm that focuses on investments in CEE and CIS with offices in Moscow, Tbilisi, Kiev, Belgrade and London. Just this company managed the tycoon’s assets, including TV station Imedi.
CBW has learnt that the acquisition process is suspended. The main reasons for this was the bank’s improper condition and a dispute between former shareholders. In particular, in terms of asset quality, several problems have been revealed. For example, in the first quarter of 2015 a share of inactive loans in the total loans increased from 4.24% to 7.57% compared with the same period last year.
It’s also noteworthy that the growth rate of total loans amounted to 0.91% in the first quarter while in the same period last year this figure reached 10.03%. However, it should be noted that a share of liquid assets in total assets amounts to 40.71% that slightly exceeds the figure for the previous year’s same period (38.34%). It is unknown what influenced the decision of potential investors, however, as reported, they were not satisfied with the bank’s assets quality.
In addition, litigation continues between the bank’s partners, as a result , the court sealed the whole 61% stake in the bank, and the party that claims to own the bank warned all potential investors about the undesirability of the purchase of the bank which is involved in the trial. Recently one of the bank’s founders, the famous Georgian financier, former Prime Minister Lado Gurgenidze has left the ranks of shareholders.
The majority shareholder of Liberty Bank was the Romanian businessman Dinu Patriciu, who recently passed away.