Georghiou secures injunction on UL

The Nicosia District Court agreed to issue a temporary injunction, ordering Bank of Cyprus to freeze all efforts to sell its 28% stake in Universal Life Insurance Co. to Aspis Pronia of Greece.

The injunction request was submitted by UL CEO Andreas Georghiou who insists that BOC should have honoured a deal giving him first option on the BOC stake. Georghiou claimed to the court that his offer to BOC was fair and was in the spirit of the agreement made five years ago.

BOC however, claimed that the reason why it declined to give first option right to Georghiou is because he and his unknown backers could not furnish to the Bank sufficient proof that their bid would receive the backing of the Central Bank of Cyprus, since absolute control of UL would automatically give the new buyers control of the Group’s banking subsidiary, Universal Bank.

This charge was dismissed by Georghiou who insists that the original agreement does not contain such clauses.

It is now up to the court to decide who is right and whether or not BOC will get the chance to sell its 28% stake in UL to Aspis, which needs the BOC stake to proceed and purchase the 35% stake that Laiki Bank holds in UL to gain absolute control of the Group.

In the event that the court decides to rule in favour of Georghiou and orders BOC to sell its stake to Georghiou, then Laiki Bank will be in the most uncomfortable position of becoming a minority shareholder in a group dominated by Georghiou, while BOC will still get its money and head for the exits.