Latvijas Krājbanka                                             06.10.2005



On the Share Redemption Offer Made by Bankas Snoras 



Pursuant to Section 77 of the Law on Financial Instruments Market, the 

management of JSC “Latvijas Krājbanka”, as the target company, communicates 

its opinion on the share redemption offer made by Bankas Snoras and its 

influence on further activities of Krājbanka.



The Law on Financial Instruments Market stipulates three parameters to be 

evaluated when quoting the minimum redemption price: 



(1) transaction price for which Bankas Snoras acquired shares under its 

ownership. Taking into account what was said by two insiders, the price of 

one share in the transaction was EUR 2.99 or LVL 2.10; 



(2) the net asset value of share, which is derived by dividing the target 

company’s net assets with the number of shares issued. In accordance with 

the last audited reports the net asset value of share as at 31.12.2004 was 

LVL 1.44. While, taking into account the last operative data published on 

30.06.2005 the net asset value of share is LVL 1.56.  

 

(3) the weighted average share price for the previous 12 mth. on Riga Stock 

Exchange, which was LVL 2.88 . 



Pursuant to the law, Bankas Snoras is not entitled to determine a lower 

redemption price than the highest of the three above parameters, i.e.  

LVL 2.88. From this point of view, the offer made by Bankas Snoras is 

compliant with the provision of the law. 



Taking into account the great interest on the part of Latvian and foreign 

financial institutions in Krājbanka’s shares on Riga Stock Exchange, their 

value at present considerably exceeds the one mentioned in Bankas Snoras 

offer. However, the number of shares traded on Riga Stock Exchange (3.1% 

of the total number of shares in almost a year) is much smaller that the 

83.1% of all shares acquired by Bankas Snoras. 



The redemption offer has the following consequences on further activities 

of the issuer:

(1)	If the minority shareholders accept Bankas Snoras redemption offer 

and more that 95% of the equity will become property of Bankas Snoras, 

Bankas Snoras has to make the final redemption offer. In such case 

Krājbanka’s shares will be withdrawn from the regulated market.

(2)	If the minority shareholders, who all together account for 5% of 

Krājbanka’s capital, do not accept the redemption offer by Bankas Snoras, 

the issuer’s shares continue to be traded on the regulated market. In such 

case the further share price will be influenced by the factors of supply 

and demand. 



In our opinion, keeping the status of a public joint-stock company has 

significant advantages in further attraction of capital and funding. Such 

a status also ensures transparency of the issuer’s activities.



As far as the current management is informed, no considerable changes are 

expected after expiry of the share redemption offer expression term, neither 

concerning the management, nor the basic activities of the company.



JSC Latvijas Krājbanka

Press Secretary

Ieva Bethere

Phone 7092 055, 6300621