Co-op, Hellenic closer to a deal – reports

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By Stelios Orphanides

The Cyprus Cooperative Bank and Hellenic Bank have made progress in their negotiations for the acquisition of the Co-op’s operations and the two sides are likely to reach an agreement in principle within the next days, the Cyprus News Agency (CNA) reported on Thursday.

Citing unnamed sources, CNA said the two sides are close to an agreement on how to cover the funding gap between the value of assets and liabilities that the buyer will take over.

The government will be issuing a new bond, on top of the €2.4bn bonds issued in favour of the Co-op two months ago, CNA said. The new bond will let the government acquire assets deemed less attractive or valuable by Hellenic.

The Co-op, bailed out by the government which injected €1.7bn in taxpayers’ money in 2014 and 2015, is struggling with a €6.5bn non-performing loans mountain, accounting for about six tenths of its loan portfolio. In March, the Co-op announced its decision to sell its operations, or part of them, to a third party after slow progress in reducing delinquent loans sparked concerns about its capital adequacy.

In addition, the government will cover future losses for Hellenic in the event acquired loans show impairments through an “asset protection scheme,” which could burden taxpayers in the future while limiting risks for the buyer.

The risk to taxpayers from the asset protection scheme is mitigated by offsetting impairments for certain loans by non-materialised losses from other loans, CNA said, adding that the issue of the bond and the asset protection scheme is expected to reduce Hellenic’s capital requirements for the acquisition to below €300m.

The agency also reported that Hellenic’s future shareholding structure remains unclear with Atlas Merchant Capital, J.C. Flowers, and Pimco seen as likely to contribute with equity in a future capital increase while Third Point, the US hedge fund which owns more than a quarter of the bank’s stock has not expressed its intentions.

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

  • flange

    the only safeguard the Cypriot taxpayer has given the incompetent morons running the coop bank and the finance ministry is that any deal needs the approval of the commission’s competition authority and the ECB.

    already the subsidies to just this one bank amount to 20% of GDP – this surely is a world wide record demonstrating the overall incompetence/thieving/corruption

    • Bruce

      Note that the previous 2.4 billion euro Development Bond deal in favour of the Coop bank was not approved by the European Commission and the ECB.

  • Alex

    All banks are basically giant ponzi schemes who promise to pay you your money back on demand. However, they only retain a small percentage of your deposits and lend the rest for interest in the hope that depositors will not all want their money out at the same time.

    Therefore the key is for banks to have internal systems and disciplines that are effecient and fast. We were saved last time around mainly because we are small. Try and save the system if Italy or Spain goes bust!

    The rise of alternative methods of currency will continue until all our own money/ asets are available whenever we all need them……

  • Barry White

    Buuurrrrpppp. So as the Tof told the sheep in 2012-2013, ‘ Coop needs no haircut or government/tax payer funds’ and the Coop is ‘ a top class bank with a human face.’

    And now the Elite has pissed away on Coop tax payers’ not €1.7 billion, not another € 2.5 billion, but at least € hundreds of millions more. Then the march of hundreds of overpaid and under worked ‘workers’ and pension liabilities fleeing to the never, never land of the Civil Service.

    Some would say that the Kleptocracy aka ROC knows no bounds of greed and incompetence.

    • Lepanto 1571

      You being who you are, are an expert on financial goings on, did you ever work for the most corrupt bank in the world, Barclays?

      • Barry White

        I Laiki your post !!!!!

        • SuzieQ

          Brilliant!

        • Lepanto 1571

          Barclays get’s more than that in fines, the other day it got fined $2 billion.

          • Barry White

            I still Laiki your post and your continued COOPeration. Barclays seem to be still in business. The others mentioned are out of business; one shut down and the other will be by Christmas.

            Barclays didn’t cost the UK taxpayers a bean. Laiki and Coop cost the Cyprus taxpayers and depositors well over at least €10 billion and rising.

            Wear it well, Mr. Lepanto.

          • Lepanto 1571

            No, but, you don’t care if their customers suffer, Barclays had to pay them back millions, they are the epitome of corruption, not only in the UK, but their thieving extended to other countries. As you say they are still in business, why are they still in business, something to do with small valises, not envelopes, brown or other.

          • Barry White

            Hello Lepanto, Hello. Earth to Lepanto, come in please.

            You really must start re-reading your own posts. Let’s take a look at your last ‘effort’, it really is a hilarious example of delusion. No one could make it up.

            As you wrote: ‘ Barclays had to pay them back millions…..’

            Hello Lepanto, I realize that this is not a concept that is well understood in the Sunny Isle.

            Why not examine how much has been paid back by the ‘Banks’ here of the €8 billion that the government of ROC confiscated from the depositors? Yes, not a cent. Speaking of corruption and money laundering, you seem to have forgotten about that tear jerker ROC President Tassos and his multi-billion dollar laundromat at Larnaca Airport specialising in ‘the Serbian business’.

            Let’s put aside the passport scam for now where nary a cent from the $2 million per head is sent to the government taxpayers.

          • Lepanto 1571

            The government has started paying back money from the haircut, they started paying it back a few months ago, please keep up.
            Which passport scam, please elaborate.

          • Barry White

            Which bank depositors were paid back, please? The girls down at the Limassol law office are doing a great trade in € 2,000,000 passports from which Prez Nik informs us that not a penny goes to the Government. Perhaps news from Cyprus does not reach you in the UK?

          • Lepanto 1571

            The people who had a “haircut”.
            Any links to your alleged passport scam?

          • Barry White

            What are you on about, Lepanto? Can you point to any Cypriot Bank depositor that received their money back?

            There has not been any.

            Passport scam? When you get to Cyprus drop into any law office, ‘facilitator’, real estate office, or ‘developer’ and they will explain it to you.

            Concentrate on € 2 million for a ‘passport’, and how the money doesn’t get to the government that owns the passports to pay down the debts of the country. The ones mentioned in the previous paragraph gobble it all up.

          • Lepanto 1571

            How would I know who the bank depositors are, I’m sure this is confidential.
            You can search CM, to read the article, as that is where I read it.

            Why did you put a question mark after passport scam?

          • Barry White

            Lepanto: “How would I know..?”

            Sums up the background and versacity of many of your posts, Lepanto.

            Barry: “Which bank depositors were paid back, please?”

            Lepanto: The people who had a “haircut”.

            Barry: ” Can you point to any Cypriot Bank depositor that received their money back?

            There has not been any.”

            Lepanto: “How would I know who the bank depositors are, I’m sure this is confidential.”

            You really do not have a clue about many things in Cyprus.

          • Lepanto 1571

            You truly are an idiot.

          • Barry White

            And you, my friend, have been exposed yet again as having no idea about Cyprus and your posts and exclamations have little or no value.

          • Lepanto 1571

            I’m not your friend, you Greek/Greek Cypriot hating troll.

          • Barry White

            You have been exposed Lexxxxo as the peddler of misinformation and at best some half truths. You cannot back up any of your ‘claims’ and insults.

            You are finished, my friend.

          • Lepanto 1571

            Dumb as duck

          • Barry White

            Indeed, your nic should be Daffy, my friend.