EFG Issues Plan for Capital Increase



EFG International, the Swiss private bank set to buy BSI from BTG Pactual of Brazil, needs to raise fresh capital to finance the acquisition. The board has now decided how it wants to generate that cash.

EFG International in February 2016 Agreed to pay about 1.3 billion Swiss francs for BSI, the private bank based in the Ticino region of Switzerland. The Zurich-based Bank has now published its plan, on which shareholders will vote at the general meeting scheduled for April 29.

The increase in capital will be carried out in several steps. The company will launch, after the Annual General Meeting, a pre-emptive ordinary share capital increase for up to CHF 500 million at a minimum price of CHF 6.12 per share, whereby existing shareholders will receive subscription rights to participate.

The final number of new shares issued and gross proceeds raised are dependent on the number of shares subscribed for by existing shareholders and new investors.

In recent weeks the Asian units of BSI have come under additional scrutiny with their connections to the Malaysian wealth fund and reports that senior management figures have been exiting the bank. 

Shareholder Increases Commitment

EFG has received the commitment of its principal shareholder, EFG Bank European Financial Group, to exercise its full subscription rights relative to its 54.3 percent stake in EFG International. Thereby increasing its commitment to subscribe for new shares in the ordinary share capital increase from the previously announced CHF 125 million to CHF 271 million.

The Bank therefore wants to issue additional shares as consideration to BTG up to a maximum amount of 250 million francs. BTG has Agreed to become a shareholder in the combined company with a maximum stake of 30 percent.

Asian Board Member Steps Down

The board of EFG International proposes the election of John A. Williamson as chairman for a one-year term. Williamson was the CEO of the company for four years through April 2015. He will succeed Niccolò H. Burki, who is set to become vice chairman.

Asia based Robert Y. Chiu will stand down as member of the board. The company has proposed the election of Steve Jacobs, vice chairman of BSI and managing partner at BTG Pactual. In addition, the bank also suggests the election of Roberto Isolani, member of the board of directors at BSI and managing partner at BTG, under the provision that BTG will hold 25% or more in EFG International as a result of the business combination with BSI.

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