Oslobanken Plans Takeover of Pareto and Rights Issue

The development of a stronger corporate finance profile has been cited as one of the main reasons for the takeover of Pareto by Oslobanken. Details of the merger plans have been kept under wraps, pending a shareholders meeting later this month and, significantly, so have the bank’s first half results. Oslobanken managing director Eric Lind told Marine Money, “We are planning to arrange the takeover of Pareto through a share issue, and we are coupling this with a rights issue at the same time.” Norwegian Stockbrokers contacted by Marine Money thought that the size of the issue would be in the region of Kr400m and 500m.

The takeover of the fast expanding Pareto could add new a dimension to Oslobanken’s ship finance activities. Pareto was already a major force in the K/S market at the start of this year, before the takeover of DnB Corporate added another 60 accounts to its portfolio. In April, the company formed a strategic alliance with the newly established Nedscan Marine Business A/S, a joint venture between the Dutch groups, NMB Corporate Investments BV, Dolfinance and former executives of DnB Corporate in Bergen. However, Eric Lind emphasized that Pareto’s strong ship finance business was not a major consideration in the takeover. He said, “We will not be involved in financing Pareto’s shipping projects, as we do not wish to become involved in both sides of a transaction. The reduction of many K/S tax benefits may restrict ship finance opportunities in the future, although most of Pareto’s ship finance projects have not been tax driven. Our main reason for taking over Pareto, however, is related to its strong business in the K/S market and project finance. We believe that this can be used to generate equity for real estate and industrial projects in the years ahead.”

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