Co-op to hire global investment banks to help with capital increase

7

By Stelios Orphanides

The state-owned Cyprus Cooperative Bank is considering hiring at least one globally operating investment bank to assist with its planned capital increase, the Cyprus News Agency reported on Tuesday without citing its source.

The Co-op is already in talks with a number of investment banks based in New York, Paris, London and Frankfurt, which evaluate positively the bailed-out lender’s cooperation with Spain’s non-performing loans management specialist Altamira, and consider the bank’s goal to tap investor equity as feasible, the agency reported.

The Co-op is expected to make its final selection following presentations at the bank’s top executive team scheduled for Tuesday next week, the CNA reported.

Selected investment banks will also be mandated to prepare a promotion strategy for the bank’s stock to institutional investors and roadshows, the CNA reported.

On Monday, it emerged that the finance ministry agreed to postpone the implementation of a government decision to donate 25 of per cent of the bank’s stock to its customers until the first stage of the Co-op’s capital increase is completed. The bank’s chief executive officer Nicholas Hadjiyiannis said on Tuesday that the bank, which is currently working on its Cyprus Stock Exchange listing, will likely complete the first share issue the earliest next June.

According to the terms of the bank’s bailout agreed with the European Commission’s Directorate General for Competition, the Cyprus Cooperative Bank will have to reduce with successive capital increases over the next three years, the government’s shareholding of currently over 99 per cent to below 25 per cent.

The Co-op, which is struggling with a 60 per cent non-performing loans ratio, has exhausted all margins of tapping equity from the taxpayer, after it received almost €1.7bn in two capital injections in 2014 and 2015.

Share.

About Author

Stelios Orphanides is a journalist at CyprusBusinessMail.com. To contact Stelios Orphanides: [email protected]

  • hornet

    wasting more taxpayer money – who would want to really invest in a bankrupt badly run so called bank??
    the investment banks will milk their exorbitant fees and no real investor will be found unless the state offers iron clad guarantees…

    • Eye on Cyprus

      They would do better to hire a hypnotist (or a hit-man) than an investment bank if they want people to pay up.

  • Mist

    How about FBME they are experienced in the ways of Cyprus?

  • Barry White

    Billions in Coop NPL’s lying there waiting to be picked up within kilometers of each branch but no can’t do that.

    Banking at its worst.

  • Bruce

    Names of most owners of NPLs with how much they owe and are behind in repayments has presumably being given to Altamira. Understand that such information on staff and ex-staff of Coop bank will not be given to Altamira.This is scandalous! At least such information on the latter delinquents should be released to the public to “name and shame” them and induce some repayments.
    But I am afraid that with the present inept management of the Coops supported by strategic debt-defaulting politicians and local municipality and council officials NPLs will continue to mount and there will be an eventual bail-in of Coop depositors.

    • Barry White

      The artful ways remain firmly ensconced in the less than modern European state.

  • Jeremy Rigg

    They need to hire about a dozen men in long black leather coats, trilby’s and dark glasses. Job done!