Greek lender Attica Bank will seek shareholder approval on Sept. 30 for a plan to issue new shares and raise up to 434 million euros ($559 million) to plug a capital shortfall revealed by a central bank stress test in March.
Unlike larger peers National Bank, Piraeus, Eurobank and Alpha, Attica is the only Greek bank that did not turn to the country’s bank bailout fund during the debt crisis.
Its bigger rivals, which were recapitalized with a combined 25 billion euros from the HFSF rescue fund, have subsequently tapped international investors through equity offerings since March, raising a total of 8.3 billion euros to boost capital.
The Bank of Greece, the country’s central bank, has asked Attica to cover a 433.2 million euro capital shortfall by Oct. 3.
Attica, with assets of 4 billion euros and a network of 79 branches, said in a bourse filing that its equity offering will comprise a rights issue and a private placement of new shares with strategic investors.
The offering will be preceded by a reverse share split to reduce the number of its outstanding shares. The price of the new shares will be decided on Sept. 30 but will not be lower than 0.30 euros each after the reverse split, the bank said.
The price of the new shares will be the same in the rights issue and the private placement.
The bank’s share price dropped 7.3 percent to 0.115 euros by 1252 GMT, against a 1.75 percent fall for the Athens bourse’s banking index.
Attica, with a current market value 129 million euros and 51 percent owned by the engineers’ pension fund TSMEDE, has hired UBS, PriceWaterhouseCoopers and Clayton to find suitable cornerstone investors to take part in the recapitalization.
It said that 15 initial expressions of interest were received in August and that binding offers from investors interested in the private placement now face a Sept. 22 deadline.
TSMEDE has told management that it intends to take part in the cash call and exercise its rights. The fund said it plans to take up to 51 percent of the rights issue, which is likely to cost about 208 million euros, though its overall holding could be diluted because of the the private placement. [Reuters]