BOC gets SEC approval for rights

The Securities & Exchange Commission approved the application filed by Bank of Cyprus Public Co. Ltd. to proceed with the publication of its prospectus for the rights issue, aiming to raise CYP 110 mln.

SEC Chairman Marios Clerides told the Financial Mirror that the application was approved, meaning that the BOC shares will trade ex-rights as of October 26.

Clerides also added that the whole prospectus was approved without providing any exemptions, but said that a formula had been found to put to rest fears that the issue would violate US securities laws.

US law specifically forbids foreign companies from submitting prospectus or invitation to solicit money from US citizens and funds, unless a separate application is made to the US authorities.

The BOC dilemma was how to conform to Cyprus and EU laws but at the same time not to break US and other non-EU laws.

The solution has been found in the form that BOC will not offer the rights to the US funds and citizens, in order not to break the US laws, but will give US and other country investors the cash equivalent of the rights benefit.

BOC will thus need to take the average price of the rights during the period when these are traded and give the benefit to those shareholders who will not be called to subscribe to the issue.

BOC has announced that it wants to raise CYP 110 mln from the market in the ratio of 1 right for every 6 shares held at the exercise price of CYP 1.40 per share.