Tunisian Saudi Bank Recapitalization: State to Inject 49.625 Million TND
Details of the Operation Revealed
Just a few days after the approval of the state's participation in the recapitalization of Tunisian Saudi Bank (TSB), the details of the operation have been made public. The Tunisian Stock Exchange (ARP) has given the green light for the state to inject 49.625 million TND, exceeding its own direct contribution. This will replace the National Office for Tunisian Tourism (ONTT), the Tunisian Electricity and Gas Company (ETAP), and Tunisair. However, the National Social Security Fund (CNSS) will subscribe to the same amount as its current participation.
Recapitalization Amount and Terms
The recapitalization amount is set at 100 million TND, achieved through the issuance of 1 million new shares at a price of 100 TND each, without an issuance premium. The new shares will be effective as of January 1, 2024. The increase in capital is reserved exclusively for existing shareholders, proportionally to the amount of their shares, with a limit of half for shareholders representing the Tunisian state and the other half for shareholders representing the Saudi state. In all cases, the condition of equality between the shares subscribed by shareholders representing the Tunisian state and those representing the Saudi state must be maintained.
Subscription Period
The subscription period is set at 6 months, starting from the date of publication in the Official Journal of the Tunisian Republic of the information notice related to the capital increase. We believe this will take place soon.
Urgency of the Operation
The operation is urgent, as the bank's cumulative losses amount to -52.8 million TND as of the end of 2022, and its own funds are now below 50% of the social capital. Its basic and solvency ratios are well below the regulatory minimums. A recovery plan has been developed, and it is up to the management to implement it. The task will not be easy, given the fierce competition imposed by banks with a larger geographic footprint. This is the major problem faced by all mixed banks that have remained halfway between their origin as development banks and their current status as universal banks.
