An affiliate of Cerberus Capital Management, L.P. (“Cerberus”) has signed a preliminary agreement to acquire 100% of the shares of VeloBank S.A (the “Bank” or “VeloBank”). Cerberus has offered a total consideration of PLN 1,075 million for VeloBank shares, comprised of PLN 375 million acquisition price and PLN 700 million recapitalization to meet the Bank’s regulatory capital requirements (subject to any closing adjustments). The agreement follows an open, transparent, non-discriminatory and competitive sale process launched by the Bank Guarantee Fund in 2023.

The completion of the transaction is subject to Cerberus obtaining all necessary regulatory approvals, among others from the European Commission and the Polish Financial Supervision Authority, and is expected to occur in mid-2024. Following the closing, VeloBank will cease to be a bridge institution and as such will no longer be subject to any restrictions on its operations imposed by the European Commission. It will also be subject to the tax on certain financial institutions (so-called ‘banking tax’).

Additionally, the European Bank for Reconstruction and Development (“EBRD”) and International Finance Corporation (“IFC”, a member of the World Bank Group) have also obtained their operations committee and investment committee approvals, respectively, to consider potential equity participations in the Bank, subject to approvals from their respective board of directors, and binding legal documentation. More information about the potential participation of EBRD and IFC and the status of their approvals can be found at their respective websites accessible through the following links:

For BFG, this transaction successfully concludes the next milestone in the process of resolution of ailing Getin Noble Bank S.A. (“GNB”), which began on September 30, 2022, when BFG took the irrevocable decision to transfer some of GNB’s operations into a bridge institution: VeloBank S.A. BFG resolution decision protected all GNB depositors and their savings amounting to PLN 38.1 billion (as of Sep. 30, 2022). That process was executed in cooperation with System Ochrony Banków Komercyjnych S.A. (the “Protection Scheme”), composed of eight largest commercial banks operating in Poland (Alior Bank S.A., Bank Millennium S.A., Bank Pekao S.A., BNP Paribas Bank Polska S.A., ING Bank Śląski S.A., mBank S.A., Powszechna Kasa Oszczędności Bank Polski S.A., Santander Bank Polska S.A).

The entire resolution process, including the disposal process of VeloBank’s shares, is closely monitored by the European Commission, which has provided necessary consent to carry out the resolution of GNB. The transaction to dispose VeloBank shares fulfils Poland’s commitments agreed with the European Commission.

More information in the press release attached.