The private placement for the share capital increase of Piraeus Bank’s parent company, Piraeus Financial Holdings, was covered some eight times, as a number of major international financial firms and institutional investors took part in the process completed on Friday.
The increase that saw Piraeus raise 1.38 billion euros enjoyed mainly the participation of foreign investors, including Norwegian investment fund Norges Bank that manages oil revenues of $1.3 trillion, US investment firm Fidelity, Bain Capital Private Equity, BlackRock and Canada’s Fiera Capital. These five investors accounted for 20% of the capital increase, while ADIA, the investment arm of the Abu Dhabi government in the United Arab Emirates, also took part with a small stake.
The private placement through the book-building process (i.e. excluding the cornerstone investors) fetched €1.17 billion. The final amount also includes the participation of the Hellenic Financial Stability Fund (HFSF) and the three cornerstone investors, i.e. John Paulson, Aristotelis Mistakidis and Helikon Investments Limited, which had committed to investing €380 million between them.
The high demand from abroad confirmed the HFSF stake at 27% along with the shares it already has, as it will invest €337.6 million, accounting for 25.6% of the capital increase.
The book entries were at the amount of €1.15 per share, which was the upper limit of the range Piraeus Financial Holdings had set. After the completion of the process, Paulson & Co will control 18.62% of Piraeus with €265 million invested, Mistakidis will own 2.9% after investing €40 million, and Helikon Investments will have 5.22%, for €75 million.
As far as the coverage domestically is concerned, accounting for 15% of the increase or 187 million shares, demand was also significant with a coverage ratio of 2, according to provisional data.
This is the biggest share capital increase a Greek bank has performed since the recapitalization process of 2015, while the coverage ratio constitutes a vote of confidence in the plan the bank’s management had announced toward the reduction of Piraeus’ bad-loan ratio to below 10%.
Notably, both Fidelity and Bain Capital are for the first time taking a holding in a Greek bank, while Helikon also holds stakes in Eurobank, PPC and Lamda Development.