The privatisation deal for Cyprus Cooperative Bank could be moments away, with Hellenic Bank putting the finishing touches on the final makeup of its new shareholder base.
Hellenic Bank, one of two bidders that successfully submitted a binding offer to acquire part of CCB, is said to be holding final consultations on shareholders, whose final composition would be the result of raising capital.
The Cypriot commercial bank, was the only bidder that openly showed interest for the “good” or healthy part of CCB, that is without the co-op’s huge burden of non-performing exposures (NPEs) amounting to €6.2 billion, roughly 60% of its total loans.
While sources say issues are still pending, the whole process is a done deal according to Kathimerini Cyprus
The other bidder, Apollo Capital Management, also met mid-May deadline to apply for the acquisition of either a part or whole of the CCB.
While sources say issues are still pending, the whole process is a done deal according to Kathimerini Cyprus.
One big issue is compensation for the deficit that would result from the transaction, with Hellenic and the Government agreeing on two items.
Sources say the state would proceed to issue a bond to Hellenic Bank to the tune of €400 million, dismissing reports that estimated the amount closer to €550 million.
More robust performance for Hellenic
Non-Performing loans within Hellenic woul come down between 18% and 20%, since the bank will absorb healthy assets from CCB, according to Kathimerini.
The government also came to agreement with Hellenic on an Asset Protection Scheme, which would cover losses for a given period of time in performing loans.
This essentially gives reassurances to Hellenic Bank that any performing loans out of a total worth of €4.5 billion that might become non-performing within a grace period, they would be covered by the state if their combined value is worth between €200 and €300 million.
This point previously raised eyebrows among economists and observers, who were shocked to learn that there was a problematic mechanism to evaluate which loans could fall in the non-performing category.
Hellenic ready to absorb 1000 co-op employees
Hellenic Bank would undoubtedly grow as a financial institution, but it would need to sack close to a thousand CCB employees, while another 1000 would be transferred over to Hellenic.
Severance packages could be worth up to €100,000 according to sources, following pressure from unions that criticised anything lower while arguing for even higher amounts.
Union representatives are reportedly going to meet with President Nicos Anastasiades on Thursday, primarily to discuss the role of the state -as the Co-op owner- in securing labour rights within the new CCB structure.