According to European Comission guidelines dated October 25, 2008 Latvia
has
started implementation of stabilization plan of financial sector.


Within this plan the Cabinet of Ministers of the Republic of Latvia on
November
8, 2008 voted on decision, paragraph 27, minutes 70 that Joint Stock
Company
“Latvijas Hipotēku un zemes banka” (100% owned by Government of
Latvia) will
sign agreement to acquire 51% share capital of “Parex banka” for
total
price of 2 Ls (two lats). 

The agreement was signed on November 10,
2008.

Due to short term nature of investment the Financial and Capital
Market
Commission of Latvia has accepted non-consolidation approach.


“Latvijas Hipotēku un zemes banka” in this deal is acting as a holder of
the
stake in “Parex banka” on behalf of Government of Latvia and will
not
assume any of liabilities of “Parex banka”. Both banks will
have
independent management, separate supervision, budgeting and risk
management.
Liability of  “Latvijas Hipotēku un zemes banka” in this deal is
limited to
it's investment value  - 2  (two lats) Ls.