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Credit, Cherry Bank takes over Banca Popolare Valconca

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Credit, Cherry Bank takes over Banca Popolare Valconca

Credit, Cherry Bank takes over Banca Popolare Valconca

After months of negotiations Cherry Bank e Banca Popolare Valconcain extraordinary administration, signed the framework agreement which governs the terms, conditions and commitments of the parties in the merger by incorporation of Banca Popolare Valconca into the institution headed by John Bossi. The agreement provides for the assignment to Banca Popolare Valconca shareholders of newly issued ordinary shares of Cherry Bank – in the ratio of one Cherry Bank ordinary share for each Banca Popolare Valconca ordinary share – without an indication of the nominal value and having the same characteristics as the ordinary shares already in circulation, thanks to which the shareholders of Banca Popolare Valconca will arrive at hold 10% of the share capital of post-merger Cherry Bank.

A way out of the crisis

For Banca Popolare Valconca the signing of the framework agreement represents the first step in the process of solving the crisis which led to its being subjected to extraordinary administration at the end of last year. Indeed, the merger by incorporation into Cherry Bank will allow recover sustainability and profitability thanks to the “hybridization” with the business model of a specialized bank, capable of intercepting market opportunities with high development potential and margins and of restoring prudential buffers on capital solidity levels, currently eroded below the regulatory minimums. At the same time integration will enhance the distinctive features of Banca Popolare Valconca as a bank with strong local roots that will continue to operate under its own brand in order to ensure continuity in the reference area.

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Cherry Bank will play the role of aggregator

For Cherry Bank this merger operation, which arises from solid industrial reasons, aims to allow it to accelerate the process already started with the integration of the Bank of the Three Venices in 2021, thus confirming the effectiveness of the strategic choices of the time and the ability to adapt tactically to the new “challenges” of the market, in which retail commercial banking is once again playing a key role.

The bank that will result from the integration will again return to play the role of “aggregator”, with obvious positive effects for the benefit of shareholders, the local area and all stakeholders.

Furthermore, as part of the merger operation and in order to favor its success, Cherry Bank will recognize a non-transferable personal right to the shareholders of Banca Popolare Valconca, who are shareholders of the Bank resulting from the merger from the date of approval of the Shareholders’ Meeting until when the conditions for exercising the same are met, which will allow them to benefit from any capital gains that may result from the positive outcome of some active disputes currently pending and from the possible disposal of a strategic asset of Banca Popolare Valconca.

With a view to supporting those shareholders who need to liquidate their shares (allocated at the time of the merger and held continuously until the date of the possible sale), the CEO of Cherry Bank John Bossi has personally undertaken to acquire or have acquired shares for a maximum total value of 2 million, guaranteeing the purchase of the first 700 shares for each requesting shareholder and for any residual shares exceeding this threshold, a pro-quota purchase until the maximum amount is reached.

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The story of Banca Valconca and the rescue of Cherry Bank

Last November, the majority of the over 4 thousand shareholders of the Rimini-based Popolare Valconca vetoed the merger with Blu Banca (formerly Banca Sviluppo Tuscia, of which Banca Popolare del Lazio is a 99% shareholder), thus destroying the operation which aimed at consolidating small institutions to strengthen their assets (that of the Romagna institution, considered too low, amounted to 59.3 million euros at the end of 2021) and ensure a stable return to profitability.

On 4 April last, the extraordinary commissioners of Valconca Bankin extraordinary administration, had granted a period of exclusive negotiation with Cherry Bank, culminated in the signing of today’s framework agreement.

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