CCB cap­i­tal is­sue ‘at an ad­vanced stage’

Financial Mirror (Cyprus) - - FRONT PAGE -

Plans to raise the gov­ern­ment-owned Cyprus Co­op­er­a­tive Bank’s share cap­i­tal are at an ad­vanced stage, at­tract­ing in­ter­est by for­eign in­vest­ment banks, sources told the Cyprus News Agency (CNA).

At the same time, Fi­nance Min­is­ter Haris Ge­or­giades told CyBC ra­dio that the aim is to is­sue free shares and to pro­por­tion­ally re­duce the gov­ern­ment’s stake in the bank, which it had res­cued with two bailouts worth a to­tal EUR 1.67 bln in 2014 and 2015.

How­ever, this de­ci­sion came un­der harsh crit­i­cism from op­po­si­tion par­ties that called the cap­i­tal is­sue a bla­tant sale of a na­tional as­set that should have been re­turned to the pub­lic.

Un­der the Co-op’s re­struc­tur­ing plan, agreed with the EU Direc­torate Gen­eral on Com­pe­ti­tion and as part of the Cyprus fi­nan­cial res­cue plan, the state should re­duce its stake to below 25% by 2020, begin­ning next year.

One way is to list the shares on the Cyprus Stock Ex­change and other bourses, while the bank, that has been merged into a sin­gle en­tity, con­tin­ues with its cost­cut­ting mea­sures.

The CNA said that the process has at­tracted in­ter­est from global in­vest­ment banks from New York, Paris, Lon­don and Frank­furt which con­sider the cap­i­tal raise as fea­si­ble. In­vest­ment banks will act as ad­vi­sors in the com­ing cap­i­tal raise.

These in­vest­ment banks, the sources in­di­cated, have wel­comed the re­cent agree­ment to set up a joint ven­ture with Span­ish as­set man­age­ment com­pany, Al­tamira for the man­age­ment of the Co-op sec­tor’s non-per­form­ing ex­po­sures amount­ing to EUR 7.2 bln and its real es­tate port­fo­lio amount­ing to EUR 400 mln.

On Mon­day, Min­is­ter Ge­or­giades stated that the state will dis­pose of its stake in the CCB share cap­i­tal, but will not pro­ceed with any sales. The process, he added, will pro­ceed in par­al­lel with but will not sub­sti­tute or re­place the CCB’s cap­i­tal raise in com­bi­na­tion with the CCB’s en­try to the Cyprus Stock Ex­change.

Last June, the gov­ern­ment an­nounced it will dis­trib­ute 25% of its stake to spec­i­fied groups of Co-op cus­tomers (bor­row­ers who ser­vice their loans and de­pos­i­tors) free of charge and did not rule out giv­ing more shares to other groups in the fu­ture.

The plan, Ge­or­giades said, aims to cre­ate a lo­cal share cap­i­tal base in the CCB.

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