Turan, 2 March 2005

The President of Azerbaijan decreed to deepen the finance and banking reforms in Azerbaijan. He ordered the Cabinet of Ministers to do the following in three months:

• attract an international financial adviser to renew Azerbaijan's credit rating;
• hold negotiations and sign contracts with respectable rating agencies to get at least two independent ratings of Azerbaijan.

The ministry also has to decrease the state-owned part in Capital Bank's authorized capital by 50% by enhancing the authorized capital twice. It will be done by issuing extra shares, which will not be bought by the state.

When the state-owned shareholding in these banks' authorized capital is privatized, the sale price will be determined by a respectable international audit company, referring to the results of the bank's recent business and the market circumstances. The decision to sell the shares to the customers advised by the international audit company shall meet the laws of Azerbaijan on the privatization of banks. The Finance Ministry is to fund the attraction of the financial adviser and the rating agencies, and fund the pre-privatization actions envisaged for IBA and Capital Bank.

According to the decree, the President's 17 April 2003 decrees on the privatization of the state-owned shares in IBA and United Joint Stock Universal Bank are no longer valid.