Marfin Financial Group, which currently holds a 10.3% stake in Laiki Bank, is determined to increase its stake to 19.9%, at a time and price at which it feels comfortable, according to Marfin Vice-Chairman and CEO Andreas Vgenopoulos.
He said that Marfin was granted permission by the Central Bank to double its stake from 9.9% to 19.9% from end of May, or 15 days before Laiki’s annual general meeting held on June 15.
“If we wanted to, we could snap up Laiki shares without even informing the market, but we chose to wait until the AGM, and then tell everyone of our intentions,” Vgenopoulos said.
As it happened, in the following two days Marfin continued to buy shares in Laiki, lifting its stake from 9.9% to 10.3%, after which it was obliged to stop its purchases after the Cyprus SEC told the Group that they were violating Cyprus securities laws as they were trading in the closed period.
A closed period is when company insiders and major shareholders with a presence on the board are not allowed to trade in their stock, one month prior to the end of the financial period (in this case June 30) and until the preliminary results are announced.
Vgenopoulos insists that Marfin cannot be considered as an insider as he and three other Marfin executives elected to the Laiki board at the AGM had not participated in a board meeting. Nevertheless, he said that the Marfin Group abided by the SEC decision and immediately stopped buying more Laiki shares.
“Work like a dog”
Vgenopoulos gave a solemn promise that he and his co-executives at Marfin “will work like dogs” to ensure that Laiki results improve further, which in turn will boost the return on equity and subsequently help boost the share price.
Pressed by the Financial Mirror to state what percentage gain in Laiki share price he would consider as acceptable, Vgenopoulos declined to comment, citing SEC regulations barring officials from talking about their share price.
Asked again by the Financial Mirror to state which level of Laiki shares Marfin would be willing to buy and how fast Marfin intends to reach the 19.9% ceiling, once again Vgenopoulos declined to go into specifics.
“It depends on market conditions, our investment objectives and overall fundamentals.”
Marfin may start buying Laiki shares after July 27, when the six month results are released.
Repeat of Marfin?
Vgenopoulos revealed that the share price of Marfin has had its ups and downs during the time when he has been at the helm of the company.
In 1999, Marfin shares were worth EUR 13.40, but then fell to EUR 6 by 2000 as the Greek market came crashing down.
“Back then we asked ourselves what we did wrong, why the share price went lower, if it was of our doing or because of market conditions and how we could turn the situation around.”
“We informed major shareholders of our turnaround plans, which were approved unanimously. Since then, our share price has been trading higher because of our hard work and zeal with which we approach the whole issue of boosting shareholder value,” said Vgenopoulos.
By 2005, the share price of Marfin had reached EUR 13.40, and towards the end of the year, the group made a capital increase at EUR 16 per share, which was heavily over-subscribed in another confirmation of confidence in Management.
Marfin shares are currently trading at around EUR 25.
Hard work
Vgenopoulos said the Laiki Executive Committee has outlined a three-year draft plan which will be studied carefully but he is keen to stress that with the involvement of Marfin, Laiki’s ROE will see a quicker boost than what the previous plans of Laiki had foreseen.
“If we don’t succeed in boosting the value of the company, hence its share price for the benefit of the shareholder, then that would mean we would have failed. I cannot talk to you about specific levels and percentage gains, but I can assure you that we shall work hard to reach our objective,” said Vgenopoulos.
