Bank of Cyprus shareholders overwhelmingly approved two resolutions during an extraordinary general meeting on Tuesday that will facilitate the island’s biggest lender listing on the London Stock Exchange.
In all, 99.74% of the votes cast during the shareholders’ meeting approved the resolutions for the establishment of a new parent holding company in Ireland and for the London listing.
Chairman Josef Ackerman had earlier sought shareholder approval to complete “the last major step towards making a listing of our shares in a major European Stock Exchange a reality”.
All shares will be listed on both the London Stock Exchange and the Cyprus Stock Exchange and will continue to trade in euros, as they do now. The stock will cease to trade on the Athens bourse and shareholders will receive new shares in the Irish holding company.
Ackerman said that the London listing will be in the best interests of all shareholders, both resident and non-resident in Cyprus, the bank itself, and the Cypriot economy.
“The listing is expected to increase the liquidity and visibility of the bank’s shares and would expose it to a broader base of institutional and other informed investors. The dual listing would also draw attention to Cyprus’ well performing economy and the opportunities offered by the CSE,” he noted.
These benefits, he stressed, “would be further enhanced by a potential eventual premium listing that would make possible an inclusion in the FTSE UK index and the associated greater interest by passive index-linked institutional and other major investors”.
He noted, however, that at this stage neither the application for a premium listing nor a subsequent inclusion in the FTSE UK Index Series is guaranteed.
Ackerman added that the likely higher scrutiny of the bank’s financial performance by analysts and investors would keep the Group’s board and senior management under constant pressure to perform and to be transparent and accountable, helping to preserve and add further to shareholder value.
He noted that the London listing would strengthen shareholder safeguards, as the new Bank of Cyprus Holdings will be required to adhere fully to the highest standards of corporate governance and ethics in the financial industry, as they are codified in the UK Corporate Governance Code.
Group CEO John Hourican said that “the proposed London listing is a significant milestone in the bank’s journey back to strength. It will increase the visibility, lead to greater liquidity in the shares and should make it easier for shareholders to trade, and increase the bank’s access to capital.”
Hourican said that the bank continues to work towards a premium listing on the LSE.
He also noted that the lender will remain a Cypriot bank with a Cypriot banking licence and operations, it will continue to be regulated by the European Central Bank and the Central Bank of Cyprus and will remain tax resident in Cyprus.
“The London listing will provide greater visibility, access to capital and encourage price discovery for our stock on a deep, highly liquid international capital market,” he said.
The scheme of arrangement, which is the legal process by which, the new holding company will become the new parent must now also be approved by the District Court of Nicosia. In that case, the bank expects that trading on the London Stock Exchange and on the Cyprus Stock Exchange will be possible before the end of February of 2017.
The bank said that key approvals have already been received from the regulatory bodies, including from the European Central Bank and the Central Bank of Cyprus, for the change in the ownership structure. Provisional approval for eligibility has also been received from the UK Listing Authority of the Financial Conduct Authority. In addition, an Investor Prospectus for the trading of the New Shares and the related Depository Interests has been approved by the Cyprus Securities and Exchange Commission.
