BOCY ‘claw­back’ ends as in­vestors pump €104 mln

Financial Mirror (Cyprus) - - FRONT PAGE -

The ‘claw­back pe­riod’ for ex­ist­ing share­hold­ers to sub­scribe to up to 20% of the 1 bln eu­ros worth of new cap­i­tal in­crease in Bank of Cyprus has ended with a to­tal of 104 mln sub­mit­ted, mak­ing the bal­ance avail­able to in­sti­tu­tion­als, ac­cord­ing to news re­ports.

Af­ter mak­ing some 800 mln eu­ros’ worth avail­able to new in­vestors at 24c a share, the claw­back process, at the same price, al­lowed present share­hold­ers to bid for up to 200 mln eu­ros worth more, but with each ap­pli­ca­tion limited to no less than 100,000 eu­ros, ac­cord­ing to strict Cen­tral Bank rules. This last re­quire­ment may have been the rea­son for a dis­ap­point­ing third of share­hold­ers re­spond­ing to the of­fer.

Al­ready, the Euro­pean Bank for Re­con­struc­tion and Devel­op­ment (EBRD) sub­scribed to 120 mln eu­ros worth, part of the es­ti­mated 700 mln eu­ros the EU’s devel­op­ment arm is ex­pected to in­vest in Cyprus, leav­ing the bal­ance for sig­nif­i­cant stakes in some of the state-owned as­sets that will be pri­va­tised over the next four years.

An­other ma­jor in­vestor group, headed by fund man­ager Wil­bur Ross, has taken up a fur­ther 400 mln eu­ros worth of the new cap­i­tal, con­sid­ered a ma­jor coup by the bank’s cur­rent man­age­ment to at­tract strate­gic in­vestors.

How­ever, the whole process has been crit­i­cised by the Rus­sian and Ukrainian new share­hold­ers, who were found to con­trol large chunks of the bank af­ter their de­posits were con­verted to eq­uity dur­ing the bank’s bail-in process last year, while for­mer share­hold­ers, whose stake was di­luted to less than 1% af­ter the bail-in, have re­sorted to le­gal mea­sures to re­in­state their share­hold­ing, or at least in­crease by at least ten­fold.

The share­hold­ers’ EGM on Thurs­day to ap­prove the cap­i­tal in­crease will prob­a­bly be a fiery one, sim­i­lar to the post-bail-in meet­ing last Oc­to­ber, when share­hold­ers de­manded to know why their stakes were with­ered down and how come ir­re­spon­si­ble past man­agers and board mem­bers were not sent to prison. This meet­ing will once again de­ter­mine a new share­holder struc­ture and the board will change for the umpteenth time.

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