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Church accelerates loan restructurings

15/01/2016 11:20
The church is accelerating the process of restructuring loans of monasteries and metropolises to repay about €190 mn owed mainly to the Hellenic Bank, the Bank of Cyprus and the Cooperative.

So far the loans of the Archbishopric have been restructured, as well as loans of Kykkos Monastery to the Hellenic Bank.

The debt to the Hellenic Bank stood around €60 mn. and both sides agreed to an exchange of church real estate property for the repayment of the debt.

The restructuring of church loans with Bank of Cyprus is expected to be completed within the next days on the basis of the practice at the Hellenic Bank, ie granting land against the debt.

The director of the audit department of the church Yiannos Charilaou told StockWatch that "all religious organizations aim to restructure their loans and gradually repay them by selling land."

Replying to a question, Mr. Harilaou noted that loan restructurings are made in cooperation with the audit department of the Holy Synod with accountants, lawyers and financial advisers of dioceses, monasteries and churches.

He added that the aim is to complete restructurings before the end of the first quarter of this year.

"The terms and conditions of the church’s agreement with financial institutions are not different for every ecclesiastical organization," he said.

Archbishop Chrysostomos recently told StockWatch that apart from giving land against the debt, in the context of the restructuring of loans, the church is also negotiating a reduction of the interest rate and extending the duration of debt repayment.

It is estimated that the total debt of ecclesiastical organizations with large Cypriot financial institutions stands at around €190 mn.

The church suffered losses of tens of millions of euros from the decisions of the Eurogroup in 2013, which led to a “haircut” of deposits, shares and securities.

The archbishopric covered the salaries of clergy from dividends of the banks as the church was one of the major shareholders in the Hellenic Bank and also held a significant percentage in the share capital of the Bank of Cyprus.

The church has not issued accounts in recent years and the exact amount of its assets and debts is unknown.