Bank of Cyprus got the green light from the Cyprus Stock Exchange to re-list later this month on the bourse that has been struggling without its bellwether stock, suspended ever since Cyprus appealed for a bailout last year and brought on a host of unpopular austerity measures.
The CSE said that it has approved the listing of about 8.9 bln shares, most of which are new titles split between the bailed-in depositors from last year and the strategic investors who pumped in €1 bln in fresh capital in August this year.
A senior CSE official told the Financial Mirror on Friday that the shares will probably start trading on Tuesday, December 16, as initially expected. That is a day after an additional subscription period opens to raise a further €100 mln from retail investors. The public offer concludes on January 9.
The CSE official also said that despite the anticipated volume of trades, the bourse is not planning to conduct a pre-session virtual trade to test its IT systems.
Investors are keen to see how the stock will fare, with an opening price set for the time being at the public offer cost of 24c.
Bailed-in depositors, who saw 47.5% of their unsecured savings above €100,000 exchanged for equity, will likely be among the first sellers, in order to pay down personal debts or even guarantees provided to the bank itself, which in the absence of market liquidity has been extremely stringent in providing new facilities.
On the other hand, investors keen to “average up” their portfolios, many of whom saw their pre-2013 holdings reduced to less than 1%, could be on the sidelines, looking for buying opportunities, as a stock support mechanism has not been put in place by the bank or its trading arm, CISCO.
The 8,904,425,940 new ordinary shares include the 3,873,269,066 issued to bailed-in depositors, 5,781,443 issued to junior bond owners who also saw their holdings converted to equity, 4,166,666,667 issued to strategic investors who subscribed to the €1 bln capital increase and 858,708,764 issued to ‘Legacy Laiki’, the defunct Cyprus Popular Bank under state administration.
The strategic investors include board vice-chairman Wilbur L. Ross Jr., who heads a group of investors who pumped about €400 mln into the bank, and the European Bank for Reconstruction and Development (EBRD) that subscribed to €120 mln.
