Bank of Cyprus announced the successful private placement 4.166.666.667 new ordinary shares at €0.24, completing the first phase of its capital raise.
The capital increase of €1 billion, combined with deleveraging actions completed after the first quarter of 2014, are expected to strengthen the Bank’s Common Equity Tier 1 ratio to 15.1% from 10.6% in the first quarter of 2014.
“The Placing was comfortably oversubscribed confirming the strong interest from institutional investors for the Bank. The shares were allocated to a broad range of institutional investors from Europe, North America and Russia, including a number of international investors introduced by WL Ross & Co LLC and the European Bank for Reconstruction and Development (EBRD),” the bank said.
The closing of the Placing is subject to a clawback of up to 20% in favour of the Bank of Cyprus’ existing shareholders under phase 2 of the Capital Raising and the satisfaction of certain conditions, including the passing of shareholder resolutions at an extraordinary general meeting of the Bank’s shareholders (the EGM) required to approve and implement the Capital Raising.
The Bank also announces that it is proceeding with phase 2 of the Capital Raising. Phase 2 will consist of an open offer to existing shareholders which will provide existing shareholders with the opportunity to subscribe, over a period of 15 business days starting from 31 July 2014, for up to 20% in aggregate of the total number of shares offered to qualified investors in the first phase and at the same price as the Placing Price with a minimum purchase consideration per existing shareholder in the Open Offer will be €100.000.
Allocations to investors in phase 1 will be adjusted to accommodate the shares subscribed for by existing shareholders in the Open Offer through the claw back so that the total gross proceeds raised from phase 1 and the Open Offer will remain at €1 billion
“Assuming these conditions are satisfied, the Bank’s issued ordinary share capital will reach €892.237.734,50 divided into 8.922.377.345 ordinary shares of nominal value of €0,10 each upon the closing of the private Placing and the Open Offer,” the bank added.
Additionally the bank will proceed with the phase 3 of the share capital increase, offering up to €100 million of new ordinary shares for subscription by all existing shareholders
HSBC and Credit Suisse acted as Lead Placing Agents, with Deutsche Bank and VTB Capital acting as Co-Lead Placing Agents. CISCO was the Local Placing Agent.
Christis Hassapis, Chairman of Bank of Cyprus Group said that the “successful Placing will significantly strengthen the Bank’s capital position and is an essential step in the restructuring of the Group.”
Noting that the strengthened capital position will improve stakeholders’ confidence in the Bank and enhance funding options available to the Bank, Hassapis added that “the fact that high calibre institutional investors were interested and participated successfully in this exercise is a testament to their confidence in the Bank and also in the economy of Cyprus.”
On his path, John Hourican, CEO of Bank of Cyprus Group said “the success of the private placing demonstrates the confidence that international institutional investors have in the Bank’s turnaround and the economic recovery in Cyprus, only a year after the Bank exited resolution status.”
“This significant investment, which is the biggest single foreign direct investment into Cyprus, will help to ensure that Bank of Cyprus becomes one of the best capitalised banks in Europe. It also enables us to accelerate the implementation of the Bank’s Restructuring Plan,” Hourican noted.
Bank of Cyprus, the island’s largest lender, has been recapitalised with depositor money, as part of the €10 billion bailout Cyprus received from the EU/IMF, under which 47.5% of deposits over €100,000 have been converted to shares.
Source: Famagusta Gazette