Piraeus Bank shares to trade ex-rights from June 5

Shares in Greece’s second-largest lender, Piraeus Bank, will trade without rights to buy into its 7.33 billion euro share issue from June 5, the Athens bourse said on Monday after the securities regulator cleared the bank’s offering prospectus.

Greece’s top four banks, including Piraeus, need 27.5 billion euros to repair their solvency after losses on sovereign debt writedowns and bad loans. They hope to regain interbank access to fund the economy out of a six-year slump.

Piraeus will issue new stock to plug a 7.33 billion-euro capital hole, aiming to raise at least 10 percent from private investors to retain management control.

Under the recapitalization rules laid down by Greece’s international creditors – its eurozone partners and the International Monetary Fund – at least 10 percent of banks’ new common equity must be raised from the private sector for them to stay privately run.

The rest of the capital will be pumped in by the Hellenic Financial Stability Fund (HFSF), a state bank rescue fund, in exchange for shares.

Piraeus will launch a 35.6-for-1 rights issue at 1.7 euros a share, adjusted for a 1-for-10 reverse share split, to raise up to 6.94 billion euros. Another 400 million euros will be raised via a private share placement.

Rights will trade from June 11 to June 18 and the subscription period for the offering will run from June 11 to June 25, the Athens bourse said.

Piraeus’s current outstanding shares will be temporarily suspended from trade from June 5 to allow for the reverse share split to clear, as per Athens stock exchange regulations. Trading will resume on June 11. [Reuters]