BOC The largest foreign investment ever made in Cyprus in 1 billion euros
BOC: The largest foreign investment ever made in Cyprus in € 1 billion
From a wide range of investors drawn by the Bank of Cyprus and one billion euros refers to the largest foreign investment ever in Cyprus. The 40% is the signing of the American billionaire Wilbur Ross, and 5% from the European Bank for Reconstruction. Details and statements in the video and the story of the author's economic ANTENNA Kyriacos Kyriakides.
Last updated: 11 hours ago Issue Date: July 27, 2014
A wide range of institutional investors from Europe, North America and Russia, and the European Bank for Reconstruction and Development, participate in the share capital of the Bank of Cyprus.
As announced by the Group, after the marathon board meeting, which ended around 11 last night and lasted more than 12 hours, covered the objective of granting shares worth one billion euros.
This is the largest foreign investment ever made in Cyprus.
In its communication, the Bank says that the issue of new shares are priced at 24 cents, while considered particularly important on the increase in the basic own funds, to 15.1% from 10.6 currently.
According to estimates by the participation of the European Bank for Reconstruction will fluctuate more than 5% of total capital.
New protagonist in foursomes BoC, highlight the American billionaire Wilbur Ross, the company which brought foreign investors committed about 40% of the investment.
Satisfaction expressed by written declaration, the President of the Bank of Cyprus, Kristis Butcher:
"This is an important step in the implementation of the restructuring plan. Strengthening the capital base will improve financing options for the Bank. The fact that a high level of institutional investors showed interest and participated in the placement demonstrates their confidence in the Bank and the Cypriot economy" .
In an interview with the news agency Reuters, the CEO John Chourigkan revealed and the next steps of the Bank of Cyprus:
"The next immediate goal is to issue between € 500 million and € 1 billion covered bonds. Would like to sell these bonds, probably in late September. (Ed with interest rates close to 3.7% with 3 9%). "
In his declaration, included in the notice of the Bank of Cyprus, Wilbur Ross, founder and Chairman of WL Ross, a company that specializes in restructuring organizations are under pressure, expressing the intention and for new investments in Cyprus:
"Following the necessary approvals from the competent authorities intend to play an active role in the revitalization of the Bank of Cyprus and we are ready for new investments in Cyprus."
In its communication, the Bank of Cyprus expresses its intention to import all of its shares on the Stock Exchange and the Athens Stock Exchange before the end of 2014.
The CSE, following a decision of the SEC, announced today the continuation of the suspension of trading of the shares of Bank of Cyprus until the end of October.
"The SEC led to that decision, to allow time under the schedule given by the company for the completion of the capital increase and the publication of the Prospectus which will involve the introduction of all shares on the CSE" the statement said.
In the second phase of the share capital increase, existing shareholders may, within a period of 15 days beginning on 31 July, to acquire additional up to 20%, while in the third phase, the Bank will provide up to one hundred million new ordinary shares again to existing shareholders.
Successful capital increase of € 1 billion in Bank of Cyprus
In a wide range of institutional investors from Europe, North America and Russia, including a number of investors attracted by the WL Ross & Co LLC and the European Bank for Reconstruction and Development granted through private placement shares valued at € 1 billion as announced by the Bank of Cyprus after marathon meeting of the Board which lasted from 10 yesterday morning to late evening.
Satisfaction expressed by the President of the Bank of Cyprus Kristis Butcher and CEO John Chourikan assembly. Ready for new investments in Cyprus appeared Wilbur Ross Founder and President WL Ross & Co LLC attracted investors for 40% of the placement.
Bank of Cyprus also announced its intention to import all of its shares as soon as possible on the CSE and ASE, adding that "the trading of the ordinary shares on these exchanges is expected to begin before the end of 2014."
Even mentioned that on March 31, 2014, the ratio of Common Equity Tier 1 capital of the Bank amounted to 10.6%.
"The increase in share capital by € 1 billion worth of combined with the effects of deleveraging that were completed after the end of the first quarter of 2014, is expected to boost capital ratios Ordinary Shares Class 1 (CRD IV / CRR - transitional provisions) in 15 6% and the Common Equity Class 1 (CRD IV/CRR- without transitional provisions) to 15.1%, "it noted.
"The Bank announced the successful completion of the private placement 4,166,666,667 new ordinary shares at a price of € 0,24 with a total gross income of € 1 δισεκατομμύριο" refers.
Second phase of the Share Capital Increase
Progressing well "in the second phase of increase in share capital (" Open Offer "), on which the existing shareholders may, within a period of 15 days beginning on July 31, 2014, to apply for a number of shares up to 20% of total shares granted to the Global Offering at the same price with the Placement Issue Price ".
The minimum investment in the Open Offer will be € 100.000 per existing shareholder specifies.
The announcement goes on to say that "the distribution to investors, during the first phase, will be adjusted to cover the shares to be allotted to existing shareholders in the process clawback, so that the total gross proceeds of the issue, both in Phase as and the Public Offer, amounting to a total of € 1 δισεκατομμύριο. "
For the completion of the Open Offer to the same conditions applicable to the Placement.
Since these conditions are satisfied, added, "the total issued share capital upon completion of the Global Offering and the Open Offer will amount to € 892.237.734,50 divided into 8,922,377,345 ordinary shares of nominal value € 0,10 per Share ".
Up to € 100.000.000 new ordinary shares in the third phase
Furthermore, it notes, "during the third stage of the capital increase, the Bank will provide up to € 100.000.000 new ordinary shares (in addition to those issued during the first and second phase) for tender by existing shareholders (excluding those participated in the Placing unless you were existing shareholders before installation), prior to any listing of shares on the Stock Exchange and the Athens Exchange (subject to obtaining the necessary approvals from the relevant authorities). "
"The success of the placement will significantly strengthen the capital position of the Bank and is an important step in the implementation of the restructuring plan," said the President of the Bank of Cyprus Christis Butcher, adding that the fact that a high level of institutional investors showed interest and participated in the placement demonstrates their confidence in the Bank and the Cypriot economy. "
John Chourikan: Significant investment
From the perspective of CEO John Chourikan welcomed the quality and range of the base of institutional investors. "This significant investment, which is the largest foreign investment in the history of the Republic, demonstrates the Bank of Cyprus as one of the best capitalized banks in Europe," he added.
In his statement, founder and Chairman of WL Ross & Co LLC Wilbur Ross said "in collaboration with the senior management of the Bank of Cyprus, have attracted international investors committed about 40% of the Global Offering".
"Following the necessary approvals from the competent authorities intend to play an active role in the revitalization of the Bank of Cyprus and we are ready for new investments in Cyprus," he added.
He also expressed his belief that "this country, which flourished before the economic crisis in Europe is on track of recovery."
Besides CSE until the end of October, the Bank of Cyprus
The continuation of the suspension of the Bank of Cyprus shares from August 1 until the end of October 2014, announced Tuesday the Cyprus Stock Exchange (CSE), and after a relevant decision of the SEC.
In a statement, the SEC states that led to this decision "to allow time under the schedule given by the company for the completion of the capital increase and the publication of the Prospectus which will involve the introduction of all the shares in the CSE ".
The SEC has taken the decision to continue the suspension of trading of the shares of Bank of Cyprus in the CSE, until the end of October 2014 at a meeting held on 21 July 2014, pursuant to Article 127 (2) of the Investment Services and Activities and Regulated Markets Laws of 2007 to 2012.
Decisions to increase the share capital of Bank of Cyprus, received the Board of Directors of Bank of Cyprus.
With the participation of the European Bank for Reconstruction ended the capital to increase the share capital of Bank of Cyprus.
Reportedly the goal to increase the share capital by 1 billion seems to have surpassed and what remains to be decided by the board is the issue price, which will determine the degree of impairment of participation of existing shareholders and the range of participation of various investors.
The discussion in the Governing Council on the issue price ranged from 21 to 25 cents to finally established at 24 cents.
Existing shareholders in the next phase will also have the right to acquire additional up to 20% while the offerings of existing shareholders will depend on the final turnout of new shareholders.
By adopting the bank will raise the funds close to 15% from 10.6% today.
In the version of the procedure of issuing the capital ended Sunday involved mainly American and British investment funds.
Developments BoC commented on ANT1 News Finance Minister Haris Georgiadis saying now will be given the success of the stress tests.
A bank's capital adequacy will be able to operate in a smooth manner.
Commenting on the reactions of the opposition to the bill divestitures Mr Georgiadis said he does not understand these reactions as yet have not seen the bill.
Decisions to increase the share capital of Bank of Cyprus is required to take the Board. It will examine the tenders submitted by foreign investment firms and decide on the share price. For today at 6 pm and the planned new extraordinary assembly of existing shareholders.
Critical characterized the meeting of the Board of Directors of the Bank, it is required to decide on the bids submitted by investment funds, financial institutions, insurance companies and individuals to participate in the effort to increase the share capital.
The Management of the Bank of Cyprus asked to approve in principle the prices offered per share, and to evaluate the profile of the investors concerned to meet the goal to raise one billion euros.
It is reported that two U.S. hedge funds have bid, claiming 54% of the share capital of the Bank of Cyprus and the majority of the Board.
Moreover, information from financial circles in Athens said that another hedge fund giant has decided to offer thirty cents per share, covering itself the target of one billion euros, and asking the majority to the Board.
The meeting began at 10:30 am and is expected to be long due to the long agenda of issues.
Remains unknown whether the Bank of Cyprus will make a formal announcement as they must first be defined and the date of the extraordinary general meeting to ratify the decisions.
At the same time, the former shareholders of Bank of Cyprus seriously considering taking legal action, and collective actions against the growth process of the share capital of the financial institution, as they feel that eliminates the minimum value that is left to negotiate the share of the Group.
The proposal for bringing actions in court, will be brought to the existing shareholders of the Bank of Cyprus in extraordinary general meeting convened for 6 pm at Archbishop Makarios III Foundation, Archbishopric.