Hellenic Bank stock rallies as it raises €354 mln

In what seemed like a nail-biting thriller, Hellenic Bank, the island's second biggest lender, was rescued by three strategic investors on Friday, barely within a deadline for its recapitalisation set by the Troika of international lenders, sending the stock to year highs on Monday and Tuesday.
New York-based hedge fund Third Point LLC, online gaming developer Wargaming.net and local investment house Demetra pumped 100 mln euros by buying shares, bonds and rights that remained unexercised after the bank's 294 mln euro issue to meet European liquidity rules.
Following a three-day suspension last week, the news propelled the share price to new highs after it resumed trading on Monday, rising 19.3% to 6.8 cents, but on low volumes, dragging the CSE All Share Index with it, up 5.2% to 100.73 points.
The scene was repeated on Tuesday, with HB rising a further 19.1% to 8.1c, with the CSE Index also rising to 106.7, up nearly 6% from the previous day.
Volumes were also relatively healthier, with a total of 241,000 euros worth of shares traded on both days, while HB shareholder Demetra also saw its stock rise 16% and 10%, respectively on Monday and Tuesday, to close at 32.6c
The Cyprus Stock Exchange had suspended the Hellenic Bank stock for a third day on Friday as investors were sought to raise the 36 mln euro shortfall in the recap plan.
With the stock price ranging between 4.7 and 5.7 cents during the past month, the share shot up in value and volume towards the end of October on rumours of potential investors.
The stock resume trading on the CSE board with a completely revised shareholder base, as Third Point and Belarus-owned Wargaming now each control a 30% stake and Demetra 15%. With the government controlling Demetra’s biggest shareholder, the Cooperative credit institutions, the state has indirectly also become a major shareholder in Hellenic, to the tune of about 5%.
The Church of Cyprus, that controlled about 25% of the bank’s shares prior to the recap, did not fully subscribe to the recent bond and rights conversion aimed to prop up Hellenic’s Core Tier 1 ratio closer to 9.0%. Now it's stake has been diluted to a quarter, closer to 7%.