CorpBanca Buys Controlling Stake In Colombia's Helm Bank For $1.32 Bln

(RTTNews) - Chile's CorpBanca (BCA) said Wednesday that it has acquired a 51.6 percent stake in Colombia's seventh-largest lender Helm Bank S.A. for about $1.32 billion. Helm Bank will be merged into CorpBanca Colombia and consolidated into CorpBanca's Colombian operations. The acquisition will make CorpBanca the fifth largest lender in Colombia in terms of loans.

CorpBanca said it made the acquisition of Helm Bank through its subsidiary Banco CorpBanca Colombia. The transaction closed on August 6, 2013, after receiving the required regulatory authorizations from regulatory agencies in Chile, Colombia, Panamá and the Cayman Islands.

In order to finance this acquisition, CorpBanca Colombia undertook an equity capital increase of about $1.00 billion, while the balance of the purchase price will be financed with its own funds.

CorpBanca subscribed in CorpBanca Colombia's equity capital for an amount equivalent to $353.8 million, while Inversiones CorpGroup Interhold Limitada subscribed for an amount of about $188.5 million. The subscription of the shares by CorpBanca and Inversiones CorpGroup Interhold Limitada has been fully paid.

In addition, Helm Corp will subscribe for $473.8 million. Consequently, CorpBanca will maintain its controlling position in CorpBanca Colombia with a 66.4 percent stake, while Helm Corp. will obtain a 20.9 percent stake.

In this step, CorpBanca Colombia has acquired 51.6 percent of the total shares of Helm Bank or 58.89 percent of the ordinary shares, acquiring control over the bank and its subsidiaries Helm Comisionista de Bolsa S.A., Helm Fiduciaria S.A., Helm Bank S.A. (Panamá), Helm Casa de Valores S.A. (Panamá), and Helm Bank S.A. (Caymán Islands).

Following the closing of Helm Corp.'s purchase of equity in CorpBanca Colombia, Helm Bank will merge with and into CorpBanca Colombia. The transaction also contemplates that CorpBanca will acquire an 80 percent stake in insurance and brokerage company Helm Corredor de Seguros S.A. from Helm Corp. for $17.7 million.

As of May 2013, Banco CorpBanca Colombia held 3 percent of the market participation in loans and 2.6 percent in total deposits from the public. Its assets exceed $5.15 billion, its loan portfolio amounted to $3.77 billion and its total deposits were $3.17 billion.

As of May 2013, Helm Bank was the seventh largest bank in the Colombia by loans. In May 2013, it registered total assets of $6.62 billion, loans of $4.77 billions, total deposits of $4.70 billion and $785 million of equity.

The merger with Helm Bank will make Banco CorpBanca Colombia the fifth-largest bank in Colombia by loans. The merged company will have a significant presence in the commercial banking and medium-high income individuals segments.

Through the merger, CorpBanca expects to achieve commercial and costs synergies of more than $100 million annually, after taxes.

Despite the merger, both Banco CorpBanca Colombia and Helm Bank will initially continue to operate separately in services, products and processes. For the future integrated bank, CorpBanca has selected a management team with extensive experience to lead the new entity.

In December 2011, CorpBanca had signed a deal to acquire Spanish bank Banco Santander SA's (STD) Colombian subsidiary Banco Santander Colombia SA for $1.16 billion.

BCA closed Wednesday's regular trading session at $15.44, down $0.15 or 0.96 percent on a volume of 21,281 shares.