KB has signed a memorandum of understanding with Bank Austria Creditanstalt (BACA) as regards the planned sale of KB's 50% stake in a subsidiary, CAC Leasing (No. 3 on the Czech market; BACA holds the other 50%), Bloomberg reported. No further details were released. Neutral until the sale price is disclosed.
We estimate the stake's fair value at CZK 630 mil.-890 mil. (USD 24 mil.-33 mil.). As the bank's net book value of the stake is a mere CZK 110 mil., we expect KB would realize a one-off pre-tax gain on the sale of between CZK 520 mil.-780 mil. (USD 19 mil.-29 mil.) either in Q2 or Q3 2003 (the timing is subject to domestic antitrust approval).
KB had earlier indicated that it might sell its stake in CAC Leasing, as it is unable to control the subsidiary effectively without a majority interest. KB could provide leasing services through two Societe Generale subsidiaries (SG holds 60% in KB), ADL Automotive and Franfinance, which are active on the domestic market (SG's Franfinance is currently No. 4 in the Czech Republic).
Jan Hájek