Major shareholders of Hellenic Bank seem to wait till the last moment before exercising their preference rights considering that no move has been made so far. Trading of preference rights commenced on February 15 and ends on March 7.
Cyprus Stock Exchange has yet to issue an announcement on the transactions of shareholders. Major shareholders seem to hold their cards close to their chest since the final share structure will depend on the moves of key players. To the extent that an investor does not exercise his/her rights, then their proportional participation and voting rights in the bank will be reduced accordingly.
According to informed sources, Wargaming will exercise their proportional rights but the question is whether they will attempt to get more in a bid to further strengthen their position in the new shareholding structure. Their share now is 24.92%. At the same time, Third Point appear to be unwilling to exercise their rights which they apparently want to sell. If this is the correct scenario, then the question is who will want to buy these shares to strengthen their position. Shareholders exercising their preference rights to the full will be subject to a 17.3% reduction due to Poppy Sarl’s private placement. Shareholders not exercising their rights may suffer a reduction of up to 51.9%.
The Bank’s prospectus said that as a result of the private placement agreement, Poppy Sarl will become the main shareholder, holding a percentage that will not exceed 18.99. In addition, the Bank’s Board of Directors entered into a subscription agreement with Emma Alpha which committed to subscribe for 71,428,571 shares up to a total amount of €50
million. Depending on the percentage of exercised rights, Emma Alpha’s shareholding in the Bank will range between 0% and 17.3% after the capital raise.
In the meantime, Demetra Investments have agreed to subscribe for its pro rata entitlement under the rights issue which amounts to 14,366,920 new ordinary shares at the total price of € 10,056,844. To the extent that the new ordinary shares will not be acquired through the conversion of rights from existing shareholders or from a private placement, the Bank has agreed to allocate Demetra with the number of shares necessary for a 20.09% shareholding. In any other case, Demetra’s shareholding will be less than that.
As for the European Bank for Reconstruction and Development which has a 5.37% share in the Bank, it is expected to withdraw from the process. The Bank’s share base now consists of approximately 24,5 thousand shareholders. Shareholders with more than 5% are Wargaming with 24.92%, Third Point Hellenic Recovery with 26.20%, Demetra Investments with 10.05%, and European Bank for Reconstruction and Development with 5.37%.