Recap enters the final straight

Recap enters the final straight

After the approval for the disbursement of the necessary funds by the eurozone, the recapitalization project of Greece’s four systemic lenders is entering its final stage on Tuesday with the Capital Market Commission’s approval of National Bank’s bulletin regarding the new shares offered to Greek investors at a price of 0.30 euros per share (or 0.02 euros before the reverse split) as it aims to draw 300 million euros from the local market.

The National Bank shares will be sold without any preferential rights, meaning that the process will be open to everyone, and there will be no limit on the level of bids that can enter the book.

National is the only one of the four systemic lenders that is selling shares to local small investors on the same terms as those offered to foreign institutionals. The other three banks allowed Greeks to enter their share capital increases provided they invested sums of at least 100,000 euros.

Alpha, Eurobank and Piraeus have completed the distribution of their new shares to investors and they are scheduled to start trading next week. Sources say that Eurobank’s new shares will start trading on December 1, with Alpha following on December 2 and Piraeus on December 4.

Trade in the old shares will start to stop from this Thursday, over about four sessions, for the reverse split to be completed and the new shares to be credited to their buyers. Trading of the new National Bank shares is set to begin in the second week of December.

The government stressed on Monday that the timely completion of the recap process within 2015 has averted the risk of a deposit haircut which “would have led to the crumbling of the economy.” It added that all major banks have been saved and that the final cost to the state will not exceed 6 billion euros, against an original estimate of 25 billion euros.

The government conceded that the the holdings of the Hellenic Financial Stability Fund (HFSF) have shrunk in the four main banks, but they are substantial in that they will enjoy full voting rights.

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