Saturday October 25, 2014 Search
Weather | Athens
19o C
12o C
News
Business
Comment
Life
Sports
Community
Survival Guide
Greek Edition
Greek bill gives rescue fund legal cover for bank capital boosts

By Lefteris Papadimas & George Georgiopoulos

Greek banks that are majority-owned by the country's bank rescue fund HFSF will be allowed to issue new shares to boost their capital at market prices, according to a draft bill that also gives the rescue fund legal cover to see its stakes diluted.

The draft legislation obtained by Reuters is part of an omnibus bill on prior actions demanded by the country's international lenders, the European Union and the International Monetary Fund, to release the next tranche of bailout loans.

The fund currently owns the majority of Greece's four biggest lenders - National Bank, Alpha Bank, Piraeus Bank and Eurobank - after injecting 25 billion euros ($34.35 billion) last summer to recapitalise them in exchange for shares.

The draft bill stipulates that the rescue fund's stakes in the banks can be diluted through equity offerings, with the HFSF waiving its rights to new shares issued by the banks.

Under the proposed legislation, the HFSF can give its green light to new share offerings by the banks at prices that are lower than those in previous recapitalisations.

The move opens the way for the planned capital increase by Greece's third largest lender Eurobank, which needs to cover a 2.945 billion euro capital shortfall that the central bank's stress test revealed this month.

Eurobank, 95 percent owned by the HFSF, was recapitalised by selling shares to the fund at 1.54 euros each. Its planned issue of new shares is expected to be priced much lower.

Under the draft law, the fund's board can decide on the price of the share offerings based on a fair value evaluation by two independent financial advisers, taking into account prevailing market conditions.

The previous law on Greek banks' recapitalisation did not clarify how the rescue fund would act regarding future capital boosts for the lenders.

Piraeus Bank on Wednesday became the second Greek lender to successfully complete a 1.75 billion euros share offering to bolster its equity capital and pay back preferred shares held by the state.

Peer Alpha Bank closed books on a 1.2 billion euro equity offering on Tuesday.

The draft legislation also sets «bail in» clauses for shareholders and subordinated debt holders to minimise state aid in line with EU directives.

[Reuters]

ekathimerini.com , Friday March 28, 2014 (09:40)  
TAIPED waits for green light from Eurostat
Trade deficit shrinks on big drop in imports
SMEs unable to claim subsidies
Taxes kept growing in second quarter
Athens, Nicosia satisfied by EU leaders´ stance toward Ankara
A reference in Friday’s European Council conclusions calling on Turkey to respect Cyprus’s sovereign rights left Athens and Nicosia content with the outcome of the European Union leaders’ su...
Suspended policeman chief suspect in cousin’s murder
A 27-year-old police officer who has been suspended from duty since 2013 for extortion, is being treated as the chief suspect in a murder committed in a suburb of Piraeus on Thursday. Police...
Inside News
BASKETBALL
A win is a win is a win for Olympiakos
A bad Olympiakos defeated a worse Laboral Kutxa 63-57 to make it two out of two in the Euroleague on Friday. In a game where the two teams had an overall field goal rate of about one in thre...
SOCCER
Panathinaikos snatches point at Eindhoven
Panathinaikos offered its fans a glimpse of its glorious past in European competitions snatching a draw at PSV Eindhoven, on an otherwise bad night for Greek soccer in the Europa League, as ...
Inside Sports
COMMENTARY
Tension for tension’s sake?
It is evident that Turkish President Recep Tayyip Erdogan feeds off tension. He would barely have achieved as much as he has – and prevailed – if he had not been so keen to confront a series...
EDITORIAL
Testing ground
The Regional Authority of Attica is a good testing ground for politicians who appear to thrive on accusations to prove whether they can actually solve major problems of a practical nature. T...
Inside Comment
SPONSORED LINK: FinanzNachrichten.de
SPONSORED LINK: BestPrice.gr
 RECENT NEWS
1. A win is a win is a win for Olympiakos
2. TAIPED waits for green light from Eurostat
3. Trade deficit shrinks on big drop in imports
4. SMEs unable to claim subsidies
5. Taxes kept growing in second quarter
6. Thessaloniki Port expects 2014 to be record year
more news
Today
This Week
1. Woman killed in tram accident in Floisvo, south of Athens
2. Clocks to go back 1 hour on Sunday
3. Venizelos slams Turkey for 'flagrant violation of international law' off Cyprus
4. ECB vies for third time lucky in European stress tests
5. Cyprus GDP upgrade seen as boosting bailout exit plans
6. ECB bank assessment to show 6-billion-euro capital gap, Citi says
Today
This Week
1. The past, present and future of the Greek debt crisis
2. Greece’s closed society is central to its current malaise
3. Greece must stick to reforms, says Schaeuble
4. At least 11 banks to fail European stress tests, three in Greece, report says
5. Cyprus to block Turkey's EU talks after EEZ violation
6. Samaras’s crumbling Greek exit lacks backing from economists
   Find us ...
  ... on
Twitter
     ... on Facebook   
About us  |  Subscriptions  |  Advertising  |  Contact us  |  Athens Plus  |  RSS  |   
Copyright © 2014, H KAΘHMEPINH All Rights Reserved.