EBRD extends convertible loan to Siauliu bank

VILNIUS, Aug 6 (Reuters) - The European Bank for Reconstruction and Development (EBRD) granted a convertible loan of 30 million euros to Lithuania's Siauliu bank (SAB1L.VL), Siauliu said on Thursday.

The loan would be used to finance small and medium-sized businesses and regional infrastructure projects, which experienced difficulties due to the credit crunch, the bank said in a statement.

A part of the loan could be converted into the bank's new shares, if shareholders approve the new issue, the bank added.

"That could boost the bank's capital base and confidence, and support its growth," Algirdas Butkus, the Siauliai chairman of the board, said in a statement.

EBRD is the major shareholder at Siauliu, one of the smallest Lithuania banks, holding a 16.1 percent stake.

Siauliu has reported a preliminary net unaudited loss of 2.4 million litas ($1 million) for the first half of 2009 due to 13.7 million litas provisions for bad debt and the increased cost of capital resources. ($1=2.4 Lithuanian Litas) (Reporting by Nerijus Adomaitis; editing by Simon Jessop)