Riga  - Troubled Latvian bank Parex got a boost on Thursday when it confirmed it had agreed terms with creditors to pay back around 775 million euros (1 billion dollars) in syndicated loans.

Failure to reach a compromise deal would have seen a group of 60 lenders, including Germany's Commerzbank, demanding immediate payment, effectively forcing Parex out of business.

"Parex is glad to announce that it has successfully completed the negotiation process with its syndicated lenders, reaching an agreement on the terms of the repayment," said a company statement.

Under the terms of the deal Parex will pay 30 per cent or 232.5 million euros immediately, with further annual payments over the next two years.

"The signing of the agreement with the syndicated lenders evidences the completion of a crucial stage in the stabilization process of the bank," said Parex chairman Nils Melngailis.

Melngailis also re-affirmed that Parex's potential was being evaluated by the European Bank for Reconstruction and Development (EBRD).

On Wednesday the EBRD's Varel Freeman said the organization would confirm the exact nature of its interest in coming weeks, though it is likely to be an investment of around 100 million euros for a minority stake in Parex of around 25 per cent.

Parex's near-collapse and sudden nationalization in late 2008 shocked Latvia when founders Valery Kargin and Viktor Krasovickis sold their 85 per cent holding in the high-flying bank to the state for just 1 lat (1.80 dollars) each.

Prominent local businessman Melngailis was put in charge and has so far proved effective in reviving Parex's fortunes. (dpa)