BUDAPEST (Reuters) - Hungary will pay up to $700 million (454 million pounds) to buy Budapest Bank, the country's eighth-biggest lender, from its owner GE Capital (N:GE), the government said on Friday.
It announced in December it would buy the bank as part of efforts to increase state control over key sectors of the economy. It did not disclose the price at that time.
State-owned Corvinus International Investment signed the purchase contract on Friday, the national news agency MTI said, quoting a statement from the buyer and Hungarian Development Bank (MFB), also state-owned, which is financing the deal with a loan.
The buyer set certain conditions which will influence the final price, the statement said, without detailing the conditions.
Separately, the government said in its official legal gazette Magyar Kozlony that it provided an unconditional payment guarantee of $700 million for the purchase.
That is the maximum price, Economy Minister Mihaly Varga told Hirtv in an interview.
He confirmed that, based on an agreement with the European Bank for Reconstruction and Development (EBRD), the government would sell its stakes in Budapest Bank, MKB Bank and the local unit of Austria's Erste Bank (VI:ERST) within three years.
The government announced on Monday it would buy a stake of up to 15 percent in the Erste unit and that the EBRD would buy a similar stake.