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Urge to sell legacy Laiki assets

05/10/2015 10:02
The administrator of Laiki Bank is racing against time for the sale of the bank’s assets within the next ninety days, before the single resolution mechanism takes over in early 2016.

In his statements to StockWatch, Chris Pavlou said that efforts are made for the disposal of most assets until the end of the year.

The assets include affiliates of Laiki in five countries, the Investment Bank of Greece, and Laiki’s 9.6% share in the Bank of Cyprus.

Mr. Pavlou added that there are serious investors and various funds that have expressed their interest and are requesting for data and information on the assets of the Bank.

The list of assets for sale includes the share capital of Marfin Bank AD Beograd in Serbia and Marfin Bank Romania SA, the share capital of the subsidiary Rossisysky Promishlenny Bank in Russia, the share capital of PJSC Marfin Bank in Ukraine and the 49% share capital held by CPB in Lombard Bank Malta.

National central banks are also pushing for the sale of banks as they wish for investors with a banking profile.

Investment Bank of Greece is the administrator’s consultant in the process for the sale of assets.

Messages given out by Laiki’s asset management team suggest that IBG could be sold after the completion of the sale of the rest of the assets.

The launch of the process of expressing interest for Laiki subsidiaries in Serbia and Romania has already been announced.

The book value of the two is estimated to be close to € 50 mn.

Mr. Pavlou explains that regardless of negotiations and due diligence on the part of interested investors, the resolution authority which today is the central bank will have the final say on the sale of Laiki Bank’s assets.

"A relevant decree will have to be issued" he says.

In early 2014 it was estimated that the total value of Laiki assets could potentially reach € 750 mn.

However, the biggest asset, its participation in the Bank of Cyprus, does not exceed € 160 mn in market value today.

Uninsured Laiki depositors lost a total of € 4 bn through the bail-in of March 2013, while uninsured depositors of the Bank of Cyprus lost € 3,9 bn.

If eventually Laiki assets are sold for € 0,5 bn, 87% of their deposits would be lost compared with 47,5% lost in the haircut of deposits at the Bank of Cyprus.