Co-op receives two bids in good bank, bad bank scenarios

The Cooperative Central Bank (CCB) announced on Monday it has received two bids as part of its privatisation process launched in March, with one bidder going after the ‘good bank’ scenario.

The two bidders are Hellenic Bank, a Cypriot commercial bank, and US-based Apollo Capital Management, and both submitted binding offers by the deadline on Monday.

“The Cyprus Cooperative Bank is pleased to confirm that it has received today two proposals from interested parties relating to a Strategic Transaction as per the Invitation for Expressions of Interest,” a CCB press release said.

Hellenic Bank was the only bidder that openly showed interest for the CCB but without the co-op’s huge burden of non-performing exposures (NPEs) amounting to €6.2 billion, roughly 60% of its total loans.

It is not clear which part of the CCB is included in the Apollo bid, which comes from a global company operating as an investment management firm, raising, investing and managing private equity, credit, and real estate funds, as well as single investor funds.

In the meantime, also on Monday, the European Commission approved the acquisition of Altamira Cyprus by a joint platform with CCB and Apollo.

CCB and Altamira had launched an effort in 2017 to tackle jointly the NPL’s of the co-op, with Finance Minister Harris Georgiades praising the decision as a decisive step towards dealing with NPL’s.

Altamira Cyprus is active in the management, enforcement and recovery of non-performing loans, currently from CCB only. The Commission says that now the company intends to expand its activities to provide its services to other banks and financial institutions in Cyprus.

The Commission concluded that the proposed transaction by Apollo and CCB over Altamira would raise no competition concerns as it would increase the number of non-performing loan management service providers in Cyprus, thus improving the competitive environment.