Bank of Financing for Small and Medium-Sized Enterprises Announces Capital Restructuring

The Bank of Financing for Small and Medium-Sized Enterprises (BFPME) has announced a dual operation on its capital. The decision was made during an Extraordinary General Assembly held on March 28, 2024. This move is in accordance with the provisions of Article 31 of the 2024 Finance Law and the Decision of the Commission for the Cleanup and Restructuring of Publicly-Held Enterprises dated November 2, 2023. The objective is to readjust the bank's financial structure, reduce losses, and prepare it for a new phase of development.

Operation Details

The operation will be carried out in the form of an accordion-like restructuring. In the first stage, the bank's social capital will be reduced from 100 million Tunisian dinars (Mtnd) to 10 Mtnd to absorb past losses. The nominal value of the share will also be reduced from 10 Tunisian dinars (Tnd) to 1 Tnd.

In the second stage, a recapitalization with the suppression of the preferential subscription right will be approved, amounting to 59,060 Mtnd. This will be achieved by converting the amount owed to the Tunisian state, resulting from the Japanese credit line granted to the bank on March 15, 2008, into a capital participation. The bank's social capital will thus be 69,060 Mtnd.

Implementation and Timeline

The General Assembly specified that the operation requires obtaining the necessary approvals in accordance with the regulations governing banks. The subscription period is 30 days, starting from the date of publication in the Official Journal of the Tunisian Republic of the information notice regarding the capital increase.

Financial Situation

The financial statements for the 2022 exercise are not publicly available. However, provisional figures from the Ministry of Finance's report on public enterprises indicate a 2022 result of -11,300 Mtnd. The ratio of classified claims stands at 86.9%, and the liquidity ratio is 55.4%, below the regulatory minimum of 100%. The Tier 1 ratio is even negative, at -2.8%. The recapitalization has come at an opportune time.