Piraeus Bank and Marfin Investment Group announced on Wednesday a 250-million-euro strategic cooperation agreement that will considerably lighten the financial burden on MIG, allowing it to move ahead with its business planning with greater flexibility and efficiency. It will also make Piraeus MIG’s biggest stakeholder with a 17.7 percent holding.
Analysts say the deal between the two groups could mark the first major step in the ongoing process of change in the structure of local business, as both groups have holdings in sectors such as food, health, coastal shipping and information technology, among others.
Sources from Piraeus said that the easing of MIG’s financial burden will also reduce the pressure on a number of significant enterprises that MIG participates in, additionally securing the interests of the bank as the investment group’s main creditor.
As the Piraeus statement read, “with the implementation of the strategic agreement and the convertible bonds, the financial structure of MIG is considerably improved.” Piraeus will acquire the unsold stock of MIG’s convertible bonds that mature on July 29, 2019, which can be converted into shares at a price of 0.54 euros apiece. Piraeus has committed to converting bonds to shares for the amount of at least 90 million euros, which corresponds to a minimum stake of 17.7 percent of the Marfin share capital.
MIG announced that “the intention of the two parties is to convert all of the bonds to be acquired by Piraeus Bank into shares either by itself or through their sale to institutional and strategic investors acceptable by both parties.” In the case of a future sale of the MIG shares Piraeus Bank will hold, MIG’s existing main shareholders will reserve preferential rights upon the indication of its governing board. The agreement does not provide for the participation of a Piraeus Group representative on the MIG board.
“Our agreement with Piraeus signals a new growth course for our group, to the benefit of its shareholders and employees, and the Greek economy in general,” MIG chairman Andreas Vgenopoulos stated. “Piraeus’s decision to support our plans, which is an honor for us, now paves new and greater ways for the group,” he added.