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Coop Pank plans to raise additional capital for growth and issue new shares

Coop Pank, which has significantly increased its activity in recent years and today has a market share of over 5%, wishes to raise about 15 million euros of additional capital to finance its growth and proposes to shareholders the issue of new shares, providing existing shareholders a subscription preference. The exact share price, offer terms and issue schedule will be confirmed at the start of the share subscription period.

On Monday, the council of Coop Pank decided to convene an extraordinary general meeting of shareholders by November 1, 2022. The council proposes shareholders to issue 7.6 million new shares of Coop Pank, and if investors show strong interest, the number of shares could be increased to 10.1 million. The goal is to raise almost 15 million euros from the market, but once the offer price of the shares is determined and demand is identified, the funds raised could increase to 20 million euros.

When subscribing for new shares, preference will be given to nearly 30,000 current shareholders of the bank, who are guaranteed a pre-emptive right to acquire new shares in accordance with their participation in the company at the time of issue. The list of shareholders with the pre-emptive right is fixed immediately before the issue.

The bank’s largest shareholders – Coop along with local cooperatives, CM Capital, a member of the Capital Mill group, entrepreneur Andres Sonn, as well as members of the bank’s management board – have provided a guarantee for subscription to new shares in the amount of almost 60% of the underlying issue volume, or in the total volume of no less than 8.5 million euros.

The council of Coop Pank will name the price and other terms of the proposed shares just before the start of the subscription period, but on November 1, the council will propose to the general meeting to set the price at or above 1.90 euros per share.

Margus Rink, the Chairman of the Board of Coop Pank, said that by increasing the share capital, the bank wants to be ready for opportunities that open up during a slowdown in economic growth and have a strong capital base when the economy returns to growth. “Since the initial listing in 2019, Coop Pank has been the fastest growing bank in Estonia, has shown good profitability throughout the years of operation and faster than expected has fulfilled its promises to investors regarding the number of customers, the size of the loan portfolio and the performance indicators. Despite the uncertainty in the economic environment, we see that domestic banks will play an increasingly important role in supporting the Estonian economy in the coming years. With the support of additional capital, we will be able to continue to increase the volume of Coop Pank’s business, thereby creating conditions for the growth of the value of our shareholders’ investments,” explained Rink.

The head of the bank noted that when making the offer, Coop Pank gives preference to current shareholders who will be able to purchase new shares in accordance with their participation in the company. “Price, schedule and other conditions will be published prior to the start of the subscription period. We are working to carry out the share issue during this year,” said Margus Rink.