Court allows BOC to dispose of UL stake

The Supreme Court has issued a Certiorari order and revoked any previous rulings/injunctions issued by the Nicosia District Court, blocking the sale by Bank of Cyprus of its stake in Universal Life Insurance Co.

Bank of Cyprus had previously announced that following the joint agreement with the Cyprus Popular Bank Pcl dated 30 May 2005 to sell their stake in Universal Life Insurance Ltd (UL) to Aspis Group had been blocked by the CEO of UL Andreas Georghiou who filed a lawsuit against the Group and requested the issuance of an injunction prohibiting the sale of BOC’s stake in UL to a third party.

The Nicosia District Court endorsed the previously issued injunction against BOC and in favour of Georghiou regarding the latter’s preemption right on UL shares.

The BOC Group secured permission from the Supreme Court to file a petition for the issuance of a certiorari preferential warrant aiming at revoking the above mentioned injunction issued by the Nicosia District Court.

The Supreme Court decision allowing BOC to dispose of its stake in UL as it sees fit is seen as a positive development for the Group since it

removes one of the main obstacles for the sale of BOC’s stake in UL. More critically, such a transaction will untap substantial liquidity for BOC’s growth from an investment which has been providing minimal returns over the last few years.

Previously BOC had announced a deal under which it would sell its 28% stake in UL to Aspis of Greece for CYP 7.3 mln. The deal also allows Laiki to sell its 35% stake in UL to Aspis at the same price for a total value of CYP 16.5 mln, giving the Greek insurer absolute control over UL.