The Resolution Authority is seeking counsellors in the next few days to lead the sale of the Investment Bank of Greece, a subsidiary of former-Laiki.
Meanwhile it is revealed that the bank has lost half its value in investments (€300 million) since 2013 when it was placed under resolution.
The latest developments regarding the management of the assets of former-Laiki were discussed during Wednesday’s meeting of the House Institutions Committee.
The main topic of discussion was the sale of half the Bank of Cyprus stocks owned by Laiki, with the former-bank’s creditors being concerned that they lost money with this transaction.
Laiki’s administrator Kleovoulos Alexandrou informed MPs that in the coming days there will be advertisements in Cyprus and foreign press in search of investment advisors with the aim of selling the assets of IBG in Greece and its three subsidiaries.
The sale of 21 million Bank of Cyprus stocks at a share price of €3.05 brought in a total of €65 million, while the negotiating price of the shares during the day of their sale was €3.25.
Representative of the Resolution Authority Michalis Stylianou argued that the sale was completed at the best possible price. On the basis of counsel from HSBC and Deutsche Bank, the sale was made at a price approximately 5% lower in the average share price over a 10-day period.
€300 million lost
As has been noted, the Laiki assets are already reduced by 50%. The vaule of Laiki assets in March 2013 was according to a KPMG estimate €600 million, while today it is €300 million, said Stylianou. He also argued against the estimate of the Laiki Depositors’ Association (SYKALA) which says that the original value was €900 million. The largest drop in value, at €250 million, is due to the drop in share value of Bank of Cyprus said Stylianou. From an estimated €380 million it dropped to €130 million.
The Resolution Authority representative was asked why the entirety of the stock portfolio was not sold. He argued that this was done to mitigate risk, while going on to clarify once more that the law does not allow for shares to be given back to the creditors. It was judged, he added, that the most appropriate time to sell the stocks was after they entered the London Stock Exchange, and after the bank announced its annual results for 2016, which was March 2017.