STOCKS: BOCY board meets, expected to give way to new shareholders

The Bank of Cyprus board is meeting on Tuesday to consider a stern letter sent by Central Bank Governor Chrystalla Yiorkadji directing them to resign and seek re-election, if they wish, at a shareholders’ meeting after the latest company restructuring.
The board had initially asked the centralbanker to vet US-based investor Wilbur Ross, who is pumping 400 mln euros into the island’s biggest lender as part of the 1 bln recapitalisation and will now control 19% of its capital.
According to press reports, Yiorkadji replied that instead of adding Ross as the 14th member to the current 13-strong board, that they should all resign and seek re-election at an upcoming shareholders’ meeting.
It is unclear if the European Bank for Reconstruction and Development (EBRD) will also seek a board representation, to ensure that its investment of 120 mln euros is under check.
The centralbanker also warned the board to refrain from taking any executive decision that would impair the bank’s activities or burden a future management with unnecessary responsibilities.
In any case, the current board still has to approve the final part of its recapitalisation plan, to include 100 mln euros worth of shares offered to retail and old investors at 24c each, as was the case with institutional investors, with the total recapitalisation adding up to 1.1 bln. Once this is completed, the bank's adjusted share register will determine the new ownership and the stock will be ready to resume trading on the Cyprus Stock Exchange.