2024-09-14 05:16:35
The Warsaw Stock Exchange (VSE) and the Central Bank of the Republic of Armenia (CBA) have signed a memorandum of understanding regarding negotiations to acquire 65% of the Armenian Stock Exchange (FSA) from the CBA.
A possible acquisition of the Armenian Stock Exchange by VBF requires, among others, due diligence and appropriate corporate approvals.
The initial estimated value of 100% of the Armenian Stock Exchange is around 6 million Polish zlotys (1.6 million US dollars).
In 2020 On September 18, the Management Board of the Warsaw Stock Exchange (WSE) and the Central Bank of Armenia (CBA) signed a memorandum of understanding on the negotiations for VSE to acquire a 65% controlling stake in the Stock Exchange of Armenia. Consent is not binding. The final terms of the acquisition will depend, among other things, on the results of conducting the necessary due diligence and the relevant corporate approvals.
“The established relations between VBF and the Central Bank of Armenia are good news for both sides. There is a need for quality investments in many branches of Armenia’s economy, so the country has huge growth potential. Investment is a driver of economic growth, especially in emerging markets. I think the acquisition of the Armenian Stock Exchange by the VBF will contribute to the rapid growth of the Armenian capital market, and the Warsaw Stock Exchange will be able to provide a satisfactory return on investment. It is also important that Poland contributes to the establishment of emerging markets, which is a good direction,” said Jacek Sasyn, Poland’s Deputy Prime Minister and Minister of State Assets.
The term sheet signed between the VBF and the Central Bank of Armenia defines the framework conditions for further negotiations aimed at concluding a possible investment agreement. In the next step, VBF will conduct a comprehensive study, develop a five-year plan for the development of the stock exchange of Armenia in cooperation with the Central Bank of Armenia and the Stock Exchange of Armenia, and define the final terms of the investment agreement, which may differ from the framework terms.
“VBF is a stable and steadily growing company in the heart of the Polish capital market and a leader in the stock exchange industry in Central and Eastern Europe. I am sure that the great experience and knowledge gained during the last 30 years of the Warsaw Stock Exchange will contribute to close and fruitful relations with the financial market of Armenia,” said Dominik Kaczmarski, head of the Department of Analysis and Reports of the Ministry of State Assets of Poland, chairman of the Supervisory Board of VBF.
For its analyzes prior to the implementation of the terms sheet, the VBF defined a list of more than a dozen possible strategic projects aimed at the long-term development of the stock exchange of Armenia. The main areas of development include the implementation of the latest solutions based on modern technologies, the organization of commodity-commodity trading, support for the dual listing of VBF and Armenian Stock Exchange issuers, and the provision of a modern trading platform.
“We see many areas where the development of Armenia’s capital market can be boosted. Key areas are digitization and process automation, which are now key pillars of stock exchanges in developed economies. The possible acquisition of the Armenian Stock Exchange will help us expand our services and embark on the implementation of the #GPW2022 strategy. On the other hand, with this, the “know-how” of the VBF Group will be made available to the Stock Exchange of Armenia,” pointed out the chairman of the VBF Management Board, Marek Dietl.
The consolidated revenue of FBF in 2019 was PLN 6.4 million (USD 1.71 million), earnings before interest, taxes, depreciation and amortization (EBITDA) PLN 2.0 million (USD 0.53 million). ) and net profit of 1.3 million zlotys (0.35 million USD). As of December 31, 2019, FBF’s total assets amounted to 6.5 million zlotys (1.73 million USD). The initial non-binding valuation of 100% of FBF’s equity is equal to the company’s 2020 to the current book value as of June 30, i.e. about 6 million zlotys (1.6 million USD). The price of the possible acquisition of a share in the Stock Exchange of Armenia by VBF will be confirmed after due diligence.
“We are glad that we have reached an agreement on the framework of our future cooperation with VBF. This mutually beneficial transaction is of long-term strategic importance for both parties, and we are also pleased to state that we see VBF as a partner that shares our vision for the further development of capital markets. VBF’s leadership in this venture provides an opportunity to bring their experience and know-how and make the Armenian Stock Exchange a solid, innovative and convenient platform, serving as a gateway to new markets for investors. This will also lead to the realization of our mutual aspirations for regional expansion,” said Martin Galstyan, Chairman of the RA Central Bank.
The main task of the FBF is the organization of trade in financial instruments and the implementation of the activities of a clearing house and settlement company for transactions in financial instruments in Armenia. The company’s office is located in Yerevan, the capital of Armenia. The Central Bank of Armenia controls 90.1% of the Armenian Stock Exchange. The remaining 9.9% are shares of the Armenian Stock Exchange. After the transaction, the Central Bank of Armenia will retain 25% of the Armenian Stock Exchange, and the remaining 10% will be acquired by a third party, to be appointed by VBF.