On October 1, JSC Gunay Bank starts to attract 50 million manat

BSE announced terms of placement 10 450 shares of JSC Gunay Bank. In the event of a successful outcome, the bank's capital will by 40% exceed AZN 50 million required by the Central Bank by January 1, 2015.

The underwriter (LLC Tekhnika Capital Management) will offer the bank's shares totaling 49,982,350 manat from the 1st of October. Placing of the shares may be delayed until the 4th of September 2015.

This is the second attempt to raise capital in the bank this year. According to the prospectus, today paid-up share capital is 21,097,813 manat. The right to acquire shares in a beneficial order has not been provided. Therr are 4,411 outstanding shares with a nominal 4 783 manat each.

Established in 1992, JSC GunayBank is a family owned bank and belongs to the family of Mahmoud Mammadov. In the first years of independence Mahmoud Mammadov was considered a successful businessman, engaged in import-export business, industrial and commercial enterprises, a TV channel, a newspaper, and even a political party he was the leader of. After the events of March 1995, which are regarded by the authorities as "a coup attempt", Mammadov not only left the political scene, but was no longer seen in business circles.

Mahmoud Mammadov owns a 51.3% stake in GunayBank. Among the nine shareholders of the bank there are his wife, daughter and sister, who also own shares in several million manat. It is unknown if they will buy new shares. At least they ahave not received dividends for the last 5 years.

Capital requirements for banks in Azerbaijan have been repeatedly revised. However, no one has ever asked the investors about the source of their payments in the bank's capital. Under conditions of high corruption in Azerbaijan capital increase becomes a kind of money laundering. --08B--