CySEC asks Hellenic Bank to further explain Co-op deal

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By Stelios Orphanides

The Cyprus Securities and Exchange Commission (CySEC) said that it requested from Hellenic Bank the issue of a supplementary public announcement to that issued on Monday informing investors about the acceptance of its offer to acquire the Cyprus Cooperative Bank’s operations.

The decision was taken after the evaluation of Hellenic’s announcement, CySEC said in a statement on the website of the Cyprus Stock Exchange (CSE) on Wednesday and added that the suspension of Hellenic Bank shares, as well as those of its third largest shareholder Demetra Investments Plc Ltd and also the latter’s largest stock owner, software developer Logicom Public Ltd, from trading will continue.

On Tuesday, Hellenic Bank said that it would acquire the Co-op’s operations for €74m in cash and that it would carry out a capital increase of €150m.

According to Hellenic, Demetra, owner of 10.1 per cent of Hellenic’s stock, had entered a subscription agreement to participate in the capital raise with up to €72.3m which could allow it to increase its stake to 20.1 per cent.

On Tuesday, Demetra said that depending on the extent to which other shareholders would participate in the capital increase, its contribution can range between €15.1m and €72.3m, which could increase its shareholding to up to 29.9 per cent, making it practically the largest shareholder in the bank.

Logicom, currently owner of 29.6 per cent of Demetra after it acquired in March a 18.5 per cent stake in it from the Co-op, said that it was ready to lend up to €20m to Demetra so that the latter could increase its stake in Hellenic Bank to 29.9 per cent.

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About Author

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

  • Bob Ellis

    Hilarious. CySEC, one of the most broken and questionable regulators in the world asking for answers. Really shows how dodgy the dealy is. Whys is it that the worlds mainstrem banks would not touch Cyprus with a barge pole ?

    • Copernicus

      Actually CySec is right in asking HB to explain the financing and the announcement of Demetra subsequent to the official announcement raises questions about their underwriting of any capital increase in HB. In fact Cosec should also look into the loan from Co Op to Logicom to buy shares in Demetra. There seems to be collusion between the Co Op to help Logicom to acquire shares in Demetra so that Logicom has a major stake indirectly in HB. This seems to be the conclusion of any independent observer and as a publicly traded bank HB should be very cautious of behind the scenes deals to acquire a stake in HB. The suspicion must be that political interference is behind all this and it cannot be ruled having in mind how the whole deal was concocted.

      • Bob Ellis

        Will anyone take the question seriously, let alone the answer. Evidence of criminal culperbility was there 12 months ago and even the EU walked away.

        • Copernicus

          There have two financial scandals since 1999. The stock exchange and the Laiki/BoC. How many have been tried and convicted? There is no fat chance anyone will be found to have acted in a criminal manner and this you can be sure. If there is any blame I would put it is on those who knew better and act in concert with the government; the ECB and the EU. They knew exactly what was happening. The Central Bank is now an extension of the mOF so they do not count!

  • Wanderer

    Feel free to use this draft as an answer: “Heavy drug abuse.”