HSBC sells Laiki stake

HSBC Holdings plc announced that it has reached agreement for the sale of its 21.16% shareholding in the Cyprus Popular Bank Public Company Limited, in a deal valued at CYP 110.24 mln in cash or CYP 1.70 per share, which is at a 23% discount compared to the CYP 2.20 price prevailing on the CSE.

The purchasers are: Marfin Financial Group, Tosca Fund and Laiki Bank (Nominees) Ltd on behalf of the staff. HSBC Holdings plc were advised by its investment banking arm and Investment Bank of Greece S.A. acted for the purchasers on the transaction.

Marfin Financial Group thus becomes the largest single shareholder of Laiki Bank, having purchased 30.580.000 shares at CYP 1.70 each for a 9.98% stake of the share capital of the bank at a cost of CYP 51.986.000.

The TOSCA Investment Fund purchased 25.076.066 shares or 8.18% of the capital of the Bank at the price of CYP 1.70 at a cost of CYP 42.629.312.

Laiki Bank (Nominees) Ltd, acting on behalf of the staff of Laiki purchased 9.193.000 shares, representing 3% of the Bank’s capital at a cost of CYP 15.628.100. The transfer of the shares is expected to be completed within the next couple of days, according to an official announcement by Marfin FG.

The transaction cost is in line with Marfin policy not to pay more than 1.5 times book value or more than 15 times the expected profits for 2005.

Laiki Bank, established in 1901 is the second largest financial institution of Cyprus with 115 branches in Cyprus, 55 in Greece, 6 in the UK, 9 in Australia and an office in Guernsey while it also has representative offices in New York, Toronto, Montreal, Moscow and Johannesburg.

Its market share of loans in Cyprus is 24.3% in 2005 while in Greece, its market share is 1.63%. Recently Laiki announced the successful takeover of Centrobanka A.D. in Belgrade.