National Bank strays further from state fold

The government announced yesterday that it will sell a 10 percent stake in National Bank of Greece, the country’s largest, through an «accelerated bookbuilding» procedure. The sale of the stake, most of which will go to foreign institutional investors, will bring National Bank a step closer to total freedom from state tutelage and, more importantly for the government, provide the state coffers with at least 450 million euros in badly-needed revenue. Sale advisors Citigroup Global Market Ltd and Merrill Lynch International are expected to sell the 25.7 million shares by today. National Bank’s deputy president Apostolos Tamvakakis yesterday left, along with several aides, for London, where he will brief foreign institutional investors about the bank’s finances and will try to explain why Greece chose this specific time for its largest-ever placement. The decision was long expected, but it still took markets by surprise. National’s shares declined 4.72 percent yesterday to 18.16 euros, and trade in them was quite brisk, exceeding 1.2 million shares. According to market sources, the expected sale price is between 17.50 and 18 euros per share, a significant discount from Monday’s closing price of 19.06 euros. This will mean a revenue of between 450 and 480 million euros for the state. If, as predicted, 70 percent of the shares go to foreign institutionals and the rest to domestic institutionals, then domestic retail and institutional investors will hold 41.5 percent of the bank’s shares; foreign retail and institutional investors, 25.5 percent; social security funds, 17.1 percent; the state, through portfolio management firm DEKA, 11 percent; and National’s subsidiaries, 4.9 percent. This means that the state, which effectively controls the votes of social security funds, will remain the most important shareholder, but it will no longer be certain, for example, to appoint the management of its choice. National Bank employees yesterday called for the bank to retain its semi-public status, for a wide spread of buyers and for an important chunk of shares to be offered to social security funds. The state has undertaken not to sell a further stake in National Bank for the next 180 days. Prominent opposition MP and former New Democracy leader Miltiades Evert attacked the government for selling National «on the cheap.» In a TV interview, Evert, who is not very partisan toward privatizations, said there was a danger of National Bank falling under foreign control.

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