The refinancing of Ethniki Bank is under way, as the bank is tries to attract new private investors. The goal is to secure the necessary 1 billion euros in order complete the recapitalization program without issuing contingent convertible bonds (CoCos).
According to financing circles, the bank’s management appears to have attracted a number of investors capable of covering the target with relative ease and without resorting to CoCos. Obviously though, to what extent these investments will materialize is a different matter.
The general feeling though is that many investors (some estimate in the hundreds) will participate in the recapitalization of the bank, meaning that after the process is complete there will be no one shareholder to stand out with their shares.
The bank’s board of directors is expected to convene today to ratify their press release, which is expected to be approved by the Hellenic Capital Market Commission (HCMC) midweek. Following a reverse split of bank shares (1 new title per 10 old ones), the bank will announce the terms of issuing the new shares.
This means that the cut off date for preemptive rights will likely be the end of this week or early next week, for a 2-week negotiation period to follow. Over the next few days the bank will begin contacting its small shareholders on the importance of participating in the recapitalization.
