PPF, Moneta agree on new model to finance banks' merger

Prague, Nov 19 (CTK) - PPF Group and Moneta Money Bank agreed on a new model to finance the merger of Moneta and Air Bank group, PPF said in a press release last night.

Tanemo, Home Credit International and Home Credit N.V., the subsidiaries of PPF Group, confirm that they have reached an agreement with Moneta Money Bank on an addendum to the framework agreement on the merger of Air Bank, Czech and Slovak Home Credit operations, and Benxy (providing peer-to-peer services Zonky) with Moneta.

The shareholders of Moneta approved the framework agreement in June 2021 but rejected a separate proposal on the merger’s financing. The framework agreement addendum has changed some terms of the proposed merger and requires new approval by the general meeting of Moneta shareholders, PPF said.

If Moneta shareholders reject the transaction, PPF will no longer support the sale of its assets to Moneta, it added.

"PPF Group continues to pursue its vision of building a robust domestic bank backed by Czech capital. In our view, the merger of Air Bank and Moneta is a very appropriate yet non-exclusive platform to achieve this goal. Air Bank group has substantially outperformed earlier expectations by investors in its financial and business particulars. Its prospects in future growth indicate even more value appreciation. Under such circumstances, the amended terms offered by PPF are the last possibility for Moneta shareholders to support the proposed merger of Air Bank group and Moneta," PPF said.

"PPF is confident that the proposed transaction provides Moneta shareholders with an optimal strategy for increasing the value of their investments and generating stable dividend returns," the group said.

PPF no longer makes the sale of its Air Bank group assets conditional on it gaining control of Moneta. The addendum also guarantees existing Moneta shareholders pre-emptive rights to Moneta's newly issued shares under financially attractive subscription terms. The amended transaction terms give Moneta the certainty to finance the merger transaction and offer Moneta shareholders a unique opportunity to participate with PPF in maximising the future value generated by the merger, or eventually, according to their exclusive decision, to sell their Moneta shares under attractive terms, PPF said.

As many as 61.9 percent of the shareholders present at Moneta's extraordinary general meeting in June voted in favour of the merger in the first vote, while at least 50 percent were necessary. In the subsequent second vote on a capital hike, only 61.69 percent supported such a step, while 75 percent of votes were required.

Moneta was to acquire 100 percent of shares of Air Bank group from PPF Group for a total consideration of Kc25.9bn consisting of two components – cash payment Kc2.59bn and cash proceeds contributed by PPF Group through the subscription for 291,375,000 newly issued Moneta shares. The new shares were to be issued at Kc80 per share, increasing capital of the bank. PPF Group would then hold an estimated 55.38 percent of Moneta.

The merger would give rise to the third largest bank on the Czech market after Ceska sporitelna and CSOB.

Moneta Money Bank has been operating under this name since 2016 when it changed from GE Money Bank because the bank entered the Prague Stock Exchange. Moneta is one of the largest listings on the bourse.

PPF invests in many sectors, including financial services, telecommunications, real estate, engineering and biotechnologies. At the end of H1, PPF owned assets worth EUR40.3bn (about Kc1,020bn) and employed 80,000 people worldwide.

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