Asset sales are expected to start with Laiki’s shares in Lombard Bank of Malta by the end of September 2015, while at the same time Laiki subsidiaries in Russia and Ukraine have attracted considerable interest, the same source said.
Legacy Laiki is made up of the assets that were not transferred to Bank of Cyprus when Laiki was closed in 2013. Currently, Legacy Laiki is a minority shareholder in Lombard Bank of Malta, with a stake of 48.9%.
“It’s only natural that investors from the UK, Russia and Cyprus will be the first to show interest, as they are established on the island and are first to see the opportunity,” a senior banker, who wished to remain unnamed, told the press.
Laiki assets pose an enticing opportunity for investors, as many have shed significant value in the two and a half years since Marfin Laiki Bank merged with Bank of Cyprus and ordered to force asset stripping.
“During this time, investment in Russia and Ukraine has lost value from the war and sanctions from the West… there has also been a sharp devaluation of the rouble, following the drop in oil prices,” the same person said.
Investment Bank of Greece (IBG), a subsidiary of Laiki, is conducting the evaluation. At the end of the process, an external evaluator will be contracted in to check that a fair price has been set and procedures were transparent.
Laiki creditors who will benefit from asset sales are the former depositors whose deposits over €100,000 were bailed in, tax authorities and the state of Cyprus, pension funds, former shareholders and bondholders, former employees of the bank and anyone who has any legal claim over the bank.
Apart from IBG, Lombard and Laiki’s subsidiaries in Russia and Ukraine, Laiki assets include of 9.6% shares in BoC and Marfin banks in Serbia and Romania.
Legacy Laiki also has legal claims of €3-4 billion from former top officials and the Greek authorities.
Legacy and CBC work closely
Laiki Legacy and Central Bank of Cyprus have “reached a common understanding and have been working closely together on asset selling”, a source within the Central Bank told the press.
The two parts were at loggerheads for many months, the situation improved when Chris Pavlou was appointed as Laiki Legacyadministrator in April 2015, to replace Andri Antoniadou.
Antoniadou resigned in February 2015, claiming that Central Bank Governor Chrystalla Georghadji had a conflict of interest as a member of resolution authority and was deliberately complicating her work.