Bank of Cyprus ready for next step

The historic shareholders’ meeting to elect a new board for the Bank of Cyprus ended after a tense three hour session at the Filoxenia conference centre late Tuesday, paving the way for the bank’s restructuring plan to be approved and implemented.
The bank’s interim management came under harsh criticism from disgruntled shareholders who were not convinced with the arguments given over why their shares disappeared into thin air and their holding was diluted.
In all, 46 candidates remained in the running for 16 board seats, with Finance Ministry Director General Christos Patsalides casting a block vote, representing the 18% stake of the “legacy Laiki” depositors. Twelve of the interim board members had sought reelection while three candidates withdrew prior to the meeting.
Several lawyers representing corporate and foreign shareholders arising from the bail-in of deposits also cast block votes, including just over 8% in proxies collected by Christodoulos Vassiliades, believed to be representing major Russian clients.
Counting of the votes and proxies lasted well into the night.
The bank announced last week that its share capital as at August 30 amounted to 4,698,219,049 euros divided into 4,698,219,049 ordinary shares of a nominal value of 1.00 each, of which 81.4% is held by 21,000 shareholders arising from the conversion of unsecured deposits. A further 0.5% is held by 88,000 former BOCY shareholders and 18.1% is held by the ‘legacy Laiki’ following Popular Laiki’s closure and absorption into BOCY.
It is not yet clear if interim CEO Christos Sorotos, appointed on May 29, will stay at the helm of the bank and navigate it through the restructuring plan that has been proposed by consultants McKinsey and subject to approval or implementation by the new board.
Original BOCY shareholders, including the Church of Cyprus, who had seen their stake diluted to below 1%, withdrew an earlier court injunction to block the general meeting and reinstate their stake.
The general meeting only dealt with the election of the new board members. The draft consolidated group results for FY2012 will be reviewed by the new board on October 10.