By Yiannis Papadoyiannis
Investor response to Eurobank’s share capital increase has exceeded expectations as it was three times oversubscribed. Offers exceeded 8 billion euros against the 2.86 billion that the bank was aiming for. The price of the new shares was shaped at 0.31 euros per share.
A total of 9.238 billion new shares were issued, of which 8.3 billion (i.e. 90 percent) went to foreign investors and 923 million to Greeks. The international supply part was covered more than three times while the Greek 1.4 times. Trading of the new shares is scheduled to start on May 9.
Eurobank officials made no secret of their satisfaction with the outcome of the process, highlighting the high quality of the investors that took part. About 270 investors from the US, Canada, Europe and Asia participated. Besides a group of strategic investors who acquired a 35 percent stake in the lender, half of the participating investors are long-term institutional investors, as well as state portfolios from Europe and Asia.
As expected, the increase was covered completely by private funds, signalling the return of Eurobank to private hands. The private sector’s stake now amounts to 65 percent as that of the Hellenic Financial Stability Fund (HFSF) has been reduced from 95 percent to 35 percent.
Eurobank Chief Executive Officer Christos Megalou said on Tuesday that “the successful completion of the increase constitutes a vote of confidence in the prospects of the bank and the Greek economy. Eurobank is therefore becoming the first Greek bank to obtain a private majority in its capital base. This development is a landmark in the process of the recapitalization of the Greek banking system.”
Likewise, Anastasia Sakellariou, the chief executive of the HFSF, said that “the strong support and participation in the increase from the international and Greek investment community are particularly satisfactory and we wish to thank and welcome the new shareholders. The high level of quality and demand, as well as the participation of long-term institutional investors, international state investment funds and the group of institutional investors has been impressive.”