Shareholders of Bank of Cyprus, which recapitalized by seizing clients' deposits in 2013, on Thursday approved plans for a 1 billion euro capital issue ahead of EU-wide stress tests later this year.
The European Bank for Reconstruction and Development, partly owned by the European Union, and investors represented by US-based billionaire Wilbur Ross, were among those signing up for the equity issue pricing Bank of Cyprus at 0.24 euro per share.
Just over 87 percent of shareholders present approved the motion at an extraordinary meeting in Nicosia on Thursday. Turnout was small, however, at almost 42 percent.
"Strengthening our bank now ... no doubt will allow us to accelerate its recovery (and) we will be able to engage with the wholesale markets more easily," Bank chief executive officer John Hourican told shareholders.
The issue, which executives said represented the single largest foreign investment made in Cyprus, would allow the bank to accelerate a restructuring plan after it was almost crippled by onerous terms of a bailout for Cyprus in early 2013.
Bank of Cyprus made history in the euro zone's debt crisis as the first bank forced to convert uninsured deposits into equity as a condition for Cyprus to receive 10 billion euros in bailout aid from the EU and the International Monetary Fund.
The bank, badly hit by its exposure to debt-crippled Greece, was under the control of the island's central bank for several months last year.
The issue will take the bank's core Tier 1 capital to 15.1 percent from 11.3 percent. [Reuters]