A deal between the Co-operative Bank of Cyprus and Hellenic Bank will be sealed soon, but it appears that taxpayers will be required to pick up part of the tab.
The government will cover future losses for Hellenic through an ‘asset protection scheme’. This scheme will cover possible losses for Hellenic, especially since the bank will acquire high-risk loans in order to close the financial deficit. Initially the sum of €800 million was discussed but it is currently expected to drop to €500 million. Legal, procedural, staffing and infrastructure related matters remain to be settled.
Around 800 employees are expected to be laid off. 1,000 more employees will be transferred to Hellenic and around 800 to the carrier who will take on the CCB’s NPLs.
As of yet, it has not been made clear whether Hellenic will increase its share capital with a view to the acquisition of CCB’s operations. Large foreign funds have already expressed their desire to participate in the Bank’s share capital.
According to Bloomberg Worldview Capital Management LLP, a Cayman Islands-based company is now seeking to buy the stake of the US hedge fund Third Point in Hellenic Bank.
Source: In Cyprus