The capital raise aims at attracting investors to the nationalised bank’s share capital while reducing the government’s stake in the bank.
The Co-operative sector has been nationalised in 2014 when the state injected €1.5 billion to plug the Coops’ capital shortfall, acquiring 99% of its capital, while it also placed an additional €0.17 billion in 2015. Under the Co-ops restructuring plan, agreed with the EU Directorate General on Competition, the state should reduce its stake to below 25% by 2020, beginning next year.
The same sources have told CNA 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 €7.2 billion and its real estate portfolio amounting to €0.4 billion.
The investment banks will prepare the equity story, that is the strategy to attract fresh capital to the CCB and the holding of roadshows with prospective investors in various financial centres.
The same sources told CNA that the interested investment banks will carry out a presentation to the CCB’s executive team next Tuesday. The CCB can select one or more investment banks as advisors to the capital raise.
On Monday, Finance Minister Harris 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 give 25% of its stake in specified group 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 yesterday, aims to create a local share capital base in the CCB.
Source: Famagusta Gazette
