Tomas Fiala backs out of buying Idea Bank due to financial problems

Tomas Fiala’s Dragon Capital and Ivan Svitek, the former head of the Ukrainian Alfa Bank, will not buy Lviv Idea Bank from Warsaw Getin Holding S.A. The deal has been terminated. The Polish side released the statement through the Warsaw Stock Exchange, where its shares are traded:

“The Board of Getin Holding SA informs that as of June 25, 2020, a conditional sale agreement of 100% shares in Idea Bank based in Lviv, concluded on December 20, 2019, by the Issuer, as the seller, with Dragon Capital Investments Limited and a natural person as buyers (including Buyer 1) and Dragon Capital LLC as a broker, was terminated due to the failure to comply with the condition precedent, i.e. the Issuer and Buyer 1 did not sign the contract within the period provided specifying the sale price of the Idea Bank Ukraine.”

The parties are believed not to have agreed on the total cost of the Lviv bank.

The final price of Idea Bank was not announced to the media. Only the preliminary price tag was known: the equivalent of UAH 1.388 billion or PLN 224.76 million minus the number of dividends before closing the transaction and the price of 100% participation in the NSF (about UAH 5 million).

Last year’s preliminary agreement stated that parties could review the transaction amount after an audit report.

According to the rumors, Tomas Fiala, who wanted to lower the price as much as possible, insisted on such a review. However, the Polish side did not go for it.

Dragon Capital and Fiala are infamous for their manner of frequently underestimating asset price tags, which are not always justified. As a result, such an outcome of the transaction did not surprise anyone. Although, the financial market does not exclude another reason for the termination of the preliminary agreement - Tomas Fiala financial problems, which led him to change his mind about buying the bank.

Initially, it was assumed that Ivan Svitek would buy a 12.1% stake in Idea Bank and head this structure, and the remaining stake would go to Dragon Capital, and it would be the majority shareholder.

Andrey Pshenichnyi for the site