Piraeus and Alpha take big step toward return to private sector

By Yiannis Papadoyiannis

The share capital increases of banks Alpha and Piraeus, for 1.2 billion and 1.75 billion euros respectively, have proved an unqualified success. The book-building process ended after just a few hours as international investors offered funds totaling 5.4 billion euros, against just 2.95 billion that the two lenders had been seeking between them.

The interest in Alpha’s shares was so great that bank officials told investors from a certain point onward that no offers below 0.65 euros per share would be accepted. This price corresponds to a minor discount of 7.1 percent compared with Monday’s closing. Total offers for Alpha added up to 2.4 billion euros, while the bank will not be offering any of its shares in Greece.

Alpha will issue 1,846,163,846 new shares at 0.65 euros each, pending a decision at Friday’s general shareholders’ meeting – a mere formality. After the completion of the increase, the Hellenic Financial Stability Fund (HFSF) will see its stake drop from 81.7 percent to about 69.9 percent.

Interest in the Piraeus increase was also strong: Foreign investors offered funds adding up to 3 billion euros, with coverage of the issue reaching 165 percent. Piraeus will issue 1,029,411,764 new shares at the price of 1.70 euros apiece, which compared to Monday’s closing of 2.02 euros offers a 15.8 percent discount, also pending ratification by the bank’s general meeting on Friday. The increase will bring the HFSF stake down from about 80 percent to 67 percent.

The successful completion of the share capital increases means the two lenders have taken a big step toward returning to the private sector, after their recapitalizations last year brought them under HFSF control. Piraeus and Alpha have not only broadened their capital bases considerably; they have also proceeded to the repayment of some of the Greek state’s preferred stock.