BOCY to list on LSE, aims for pre­mium mar­ket “at a fu­ture date”

Financial Mirror (Cyprus) - - FRONT PAGE -

The Bank of Cyprus, the is­land’s premier lender that has turned around its fi­nances since the econ­omy col­lapsed over three years ago, aims to seek a list­ing on the Lon­don Stock Ex­change and main­tain its pres­ence on the Cyprus Stock Ex­change us­ing a hold­ing com­pany struc­ture.

The shares will no longer be traded on the Athens Stock Ex­change, while the bank is hope­ful it can se­cure a pre­mium mar­ket list­ing in or­der to be in­cluded in the LSE in­dices and be po­si­tioned among a broader group of in­ter­na­tional peers.

“(The) list­ing on the Lon­don Stock Ex­change marks an­other sig­nif­i­cant step in the bank’s trans­for­ma­tion,” Chair­man Dr. Josef Ack­er­mann said in a state­ment.

“We be­lieve that the bank, and its stake­hold­ers, will ben­e­fit from the greater pro­file, liq­uid­ity and ac­cess to cap­i­tal that a Lon­don list­ing of­fers. (It) will also en­hance the Group’s abil­ity, as the largest bank­ing and fi­nan­cial ser­vices group in Cyprus, to play a key role in sup­port­ing the growth of the Cypriot econ­omy.”

CEO John Houri­can said that it should hap­pen at some point in Jan­uary, but the process started on Tues­day.

“Our ob­jec­tive is to be in the pre­mium seg­ment ul­ti­mately and to be el­i­gi­ble for in­clu­sion in the FTSE in­dexes which gives a nat­u­ral buy­ing mar­ket for the shares and hope­fully im­proves liq­uid­ity and im­proves the price mo­men­tum in the stock at a fu­ture date”, he said.

“Tak­ing our­selves out of Athens is a very im­por­tant step be­cause we no longer have a Greek busi­ness and it doesn’t make sense for us, it is not a very liq­uid mar­ket, it is sub­ject to cap­i­tal con­trols and Cyprus has per­formed dra­mat­i­cally bet­ter and is my per­sonal view that we should con­tinue to dis­as­so­ci­ate our­selves from the Greek cap­i­tal mar­ket”, he said.

This mile­stone fol­lows the EUR 1 bln eq­uity rais­ing; the ap­point­ment of a new board led by Chair­man Ack­er­mann and deputy chair­man Wil­bur R. Ross, ex­ten­sive delever­ag­ing of non-core op­er­a­tions, in­creas­ing share in the home mar­ket, sig­nif­i­cant re­duc­tions in prob­lem loans (down by EUR 4.23 bln since De­cem­ber 2013) and Emer­gency Liq­uid­ity As­sis­tance (down by EUR 10.6 bil­lion since April 2013 to EUR 0.8 bil­lion as of to­day).

The bank’s an­nounce­menmt added that it “con­tin­ues to work to­wards a pre­mium list­ing on the LSE, and in­tends to ap­ply for a step up to the pre­mium seg­ment of the LSE at a fu­ture date, with the in­ten­tion of be­com­ing el­i­gi­ble for in­clu­sion in the FTSE UK In­dex se­ries. Work is on­go­ing and the stan­dard list­ing is an in­ter­me­di­ate step on this long-term path. In or­der to fa­cil­i­tate this process, a new hold­ing com­pany has been in­cor­po­rated in Ire­land, which is in­tended to be­come the new hold­ing com­pany of the Group.

After ex­am­in­ing a num­ber of po­ten­tial ju­ris­dic­tions, the bank said that it de­ter­mined that an Ir­ish in­cor­po­rated hold­ing com­pany would be ap­pro­pri­ate. Ire­land is a FTSE el­i­gi­ble Eu­ro­zone coun­try, has a com­mon law le­gal sys­tem sim­i­lar to that of Cyprus and is a com­monly adopted ju­ris­dic­tion for com­pa­nies wish­ing to ap­ply for a list­ing on the LSE. Bank of Cyprus Hold­ings plc was in­cor­po­rated in Ire­land ear­lier this year for this pur­pose.

The an­nounce­ment added that “it is in­tended that the new hold­ing com­pany will own all of the ex­ist­ing shares of the bank, and ex­ist­ing share­hold­ers will re­ceive shares in the new hold­ing com­pany in pro­por­tion to their cur­rent own­er­ship. This will be ef­fected by means of a Scheme of Ar­range­ment.

“The bank re­mains fully com­mit­ted to Cyprus and there will be no change to the day-to-day op­er­a­tions or busi­ness strat­egy as a re­sult of the change of the Group’s struc­ture. The bank’s head­quar­ters, man­age­ment and op­er­a­tions will all re­main in Cyprus and the new hold­ing com­pany will be, and the bank will re­main, tax res­i­dent in Cyprus.”

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