The bank, rumoured to have been facing hardship as a result of the adverse economic environment, slashed payroll costs last year through a voluntary exit scheme, and had gone public with investor interest from ‘various groups’, which has since materialised into negotiations with the Russian buyers.
“Negotiations are in their final stage,” a source told the Cyprus Mail. “The new structure will include an approximately 50% stake by the Russian group.”
It is understood that as a result of the new investors’ entry, existing shareholders’ stakes in the bank will be diluted accordingly.
Reports of talks between CDB’s shareholders and a Russian group were confirmed as early as last November, culminating in positive developments that are likely to see a deal finalisedsoon. Such investment may prove indicative of foreign investors’ confidence in Cypriot businesses – banks in particular – considered key in the recovery of Cyprus’ flailing economy.
But the move may attract special significance in light of the Bank of Cyprus’ rumoured preparations for raising capital in a similar manner.
CDB was established in 1963 as a state-owned company to promote economic development and was granted a commercial banking licence in 2001, and was privatised in 2008 for €75 million.
The new owners included such well-known names of the Cypriot economy as Constantinos Shacolas, Leonidas Ioannou, and the Leventis family.
Source: Cyprus Mail