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EBRD in Hellenic with 5,4%

24/09/2015 16:55
The European Bank for Reconstruction and Development (EBRD) is to become a shareholder of the Hellenic Bank with a 5,4% stake.

According to an announcement by the bank, Hellenic Bank’s Board of Directors has decided to proceed in favour of EBRD’s participation, providing the go-ahead to sign an agreement with the European Bank for Reconstruction and Development regarding the acquisition of 10.7 million new ordinary shares for a total amount of €20 million.

EBRB’s agreement with Hellenic Bank is the result of the authorization given to the Board of Directors, at the extraordinary general meeting of February 27th 2015 by the shareholders to capitalize on any strategically significant opportunity that were to arise. More specifically, the shareholders had given their approval to the Board of Directors to proceed at their discretion to increase the capital by €35 million in order to proceed with the implementation of its business growth strategy.

Recognising the strategic importance of the opportunity presented, the Board of Directors and the senior management proceeded to enter into an agreement with EBRD, paving the path to further expand cooperation with an internationally recognised institutional investor, signifying solidity and casting a vote of confidence not only to Hellenic Bank, but towards the entire banking system and economy of the country.

EBRD’s investment further reinforces Hellenic Bank’s capital adequacy. The additional capital raised will strengthen the Bank’s Common Equity Tier 1 Ratio (CET1) by 50 basis points, taking it to 14%.

The European Bank for Reconstruction and Development (EBRD) was founded in 1991 to support the countries of the former Eastern Bloc and invests mainly in the private sector. The EBRD has 66 shareholders (64 countries, the European Union and the European Investment Bank), whereas over 57% of its capital is owned by country-members of the EU.

According to HB, the Bank’s Board of Directors looks forward to expanding their cooperation with EBRD in other areas of mutual interest, as they operate in Cyprus and intend to invest significant capital across various sectors of the economy.

The signing of the agreement is expected to take place on Wednesday, September 30.

EBRD also participates in BOCY's capital with 5% and its intention is to invest €100 mn annually until 2020 aiming at a cumulative investment of €700 mn.