Alfa-Bank has completed the rehabilitation of Severnaya Kazna, with the last stage being Severnaya Kaznas takeover by Alfa-Bank.
As Alfa-Bank specified in its press release on Friday, on June 2, 2011 a record was made in the Unified State Register of Legal Entities about the termination of the activities at Severnaya Kazna through its reorganization by the takeover by Alfa-Bank.
As Alfa-Bank noted, in autumn 2008, as the economic crisis wore on, Severnaya Kazna began to face problems with liquidity and ceased deposit payments. The Chief Directorate of the Bank of Russia in the Sverdlovsk region forwarded a proposal to CBR board chairman Sergey Ignatiev seeking measures to prevent the commercial bank fr om going bankrupt.
The regulator confirmed that Severnaya Kazna had signs of the shaky financial standing, classifying the situation as “posing a threat to the stability of the banking system and legal interests of Severnaya Kaznas deposit holders and creditors, and on the basis of the Federal Law “On Taking Additional Measures to Strengthen Stability of the Banking System during the Period till December 31, 2011," addressed the Deposit Insurance Agency (DIA) with a proposal to participate in the measures to prevent the lending institution from going bankrupt. DIA accepted this offer and worked out a plan to forestall Severnaya Kaznas bankruptcy, offering Alfa-Bank to become an investor.
As an investor Alfa-Bank made an offer to Severnaya Kazna shareholders to buy out their holdings. Alfa-Banks acquisition of a controlling interest in Severnaya Kazna was finalized at the end of 2008. Alfa-Bank bought 75% of the banks shares from the executives and later another 10% interest was acquired from Swedish investment fund East Capital. In autumn 2010, after the buyout of the remaining shares from minority shareholders, Alfa-Bank upped its equity position in the Urals-based lender to 100%.
“Alfa-Bank in partnership with DIA carried out the procedure for preventing Severnaya Kazna from going bankrupt, having fully fulfilled the Urals banks obligations to the creditors. Alfa-Bank renewed all payments to the customers, retaining the conditions on deposit agreements. Furthermore, Alfa-Bank opened a VIP service center in Ekaterinburg (A-Club Ekaterinburg) wh ere Severnaya Kaznas privileged customers brought their funds to, the bank said in a press release.