Piraeus Bank has become the first systemic lender to make the 10 percent threshold of private participation in its share capital increase, as required under the terms of the sector’s recapitalization process. This was achieved after the Hellenic Financial Stability Fund (HFSF) on Friday approved Piraeus’s deal with the Portuguese owner of Millennium Bank.
Sources said the final amount that Portugal’s Millennium bcp – which is leaving the Greek market after selling its subsidiary – will offer toward the share capital increase of Piraeus will be 400 million euros. Piraeus has also absorbed the Greek subsidiary of Societe General, which contributed another 170 million euros toward its share capital increase.
This means the Greek lender has amassed 570 million euros from the two deals, which exceeds the minimum private contribution of 533 million euros to its capital increase Piraeus needed to avoid being nationalized.
The HFSF’s approval of Piraeus’s absorption of Millennium Bank comes with a bonus of 800 million euros for the Greek lender from the parent group in Portugal: This is 400 million for the recapitalization of Millennium in Greece and another 400 million for the Piraeus increase.
Piraeus saw its stock climb 4.19 percent in yesterday’s session on the Athens Exchange, outperforming the benchmark index.
The new goal for the management at Piraeus is to now draw an additional 170 million euros from the market so that it will not have to issue of convertible bonds (CoCos). It has decided to conduct roadshows in London and New York in the hope of wooing investors. The bank can issue CoCos of up to 2 billion euros.
On Tuesday, April 23, Piraeus will hold an extraordinary general meeting that will decide the details of its share capital increase. This will be followed by a meeting of the bank’s governing board, which will set the terms and the price of the new shares to be issued.
For every share they acquire, the new shareholders will have the right to buy out nine shares from those that the HFSF will cover during the recapitalization procedure.