Unibank Capital Increase

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1. Capital Increase - the proposed project is to participate in the planned capital increase by subscription to newly issued shares of Unibank. The project will provide Unibank with substantial growth opportunities and will help to further maintain its leading market position. 2. A/B Syndicated Loan - this is the 3rd syndicated loan that EBRD will arrange to Unibank. The project will be used for general corporate finance including but not limited to micro, small and medium enterprises, trade finance and retail. Both projects will have high transition impact. In particular it will help Unibank to maintain its market position and more importantly support its growth and development going forward. This in turn will fuel competition in the banking sector, improve standards of business conduct. Unibank Commercial Bank, an open joint-stock company, is one of the leading private banking institutions in the Republic of Azerbaijan, that was incorporated in 2002 as a result of a merger between M-Bank and Promtechbank. EBRD is a 15% shareholder in Unibank. 1. Equity investment through acquisition of newly issued shares of Unibank to maintain 15% shareholding in the Bank. 2. The project is a syndicated loan structured in two portions. EBRD will finance an A-portion (up to 3 years maturity), while a B-portion (18 months maturity extendable for another 18 months on the consent of B-lenders) is expected to be financed by the participating banks. To be confirmed. Unibank will be required to carry out its operations in accordance with EBRD's Environmental Procedures for Local Banks. In implementing these procedures, the bank will require its borrowers to comply, at a minimum, with national and/or local health, safety, environmental and public consultation requirements. Not associated with this operation, but Unibank has been benefiting from two projects on the technical assistance: (i) assistance of consultants helping Unibank to establish proper credit approval procedures and processes, and (ii) assistance of consultants focusing on the issues of institutional building. Mr. Faig Huseynov, Chairman of the Management Board Tel: +994 12 598 22 44/45