x

Economy

Troubled Cypriot Bank Seeks US Investors, Bring Cash Please

April 23, 2018

NICOSIA – The Cyprus Cooperative Bank, buried under 6.2 billion euros ($7.58 billion) in bad loans, is getting a lot of interest from US investment funds, CEO Nicholas Hadjiyiannis said of the troubled institution.

The bank is trying to work out a plan to sell the performing assets, the most attractive to the investors, he told the financial news agency Bloomberg.

The bank’s bad loans are equal to nearly one-third of the country’s total economic output and it’s trying to keep from going under at the same time there’s been a recovery from a 2013 crisis caused by banks holding big amounts of Greek bonds that were devalued 74 percent and losses from bad loans to Greek businesses who wouldn’t pay them back.

Cyprus Coop has a capital shortfall, continuing deposit withdrawals and in March launched a tender to find an investor either to buy all of the lender through a capital raise or to acquire the performing part of the bank.

“Three U.S. funds are among investors who have shown interest in acquiring the good part of Cyprus Coop,” Hadjiyiannis said in an interview with the news agency.

While he declined to name the funds for confidentiality reasons, Cypriot media have reported interest from Lone Star Funds, Atlas Merchant Capital and J.C. Flowers & Co.

Under the plan, which is subject to approval by the European Union’s competition watchdog, most of the bad loans will be transferred to a state-backed asset management company.

Failure to secure regulatory approval and get investors on-board would risk reigniting the financial crisis that crippled the island’s economy in 2013 and could spread ripples into Greece’s troubled economy as well as Italy, the agency said.

In 2013, reneging on promises, President Nicos Anastasiades allowed banks to confiscated 47.5 percent of accounts over 100,000 euros ($122,310), nearly wiping out the savings of many small businesses but didn’t, as he vowed, hold anyone accountable.

Rumors there could be another round of seizures at Cyprus Coop lead to a near-run on the bank with withdrawals of 1.9 billion euros ($2.32 billion) in the first three months of the year, leading the government to deposit 2.5 billion euros ($3.06 billion) to keep it afloat.

The bank’s plan hopes for a capital increase by Hellenic Bank, the country’s third-largest, backed by US funds, the news agency said it was told by people knowledgeable about the scheme.

“Investment funds have expressed interest for Hellenic if the bank secures the performing part of Cyprus Coop,” Hellenic Bank officials said, requesting anonymity as the talks are private. Hellenic has formally said it participates in Cyprus Coop’s tender.

RELATED

NICOSIA - With countries reaching out more to the ultra-wealthy for higher-class tourism, Cyprus is making its bid with the 300-million euro ($315 million) Aya Napa Marina that offers world-class facilities for yachts.

Top Stories

General News

FALMOUTH, MA – The police in Falmouth have identified the victim in an accident involving a car plunging into the ocean on February 20, NBC10 Boston reported.

General News

NEW YORK – Meropi Kyriacou, the new Principal of The Cathedral School in Manhattan, was honored as The National Herald’s Educator of the Year.

General News

PHILADELPHIA – The Federation of Hellenic Societies of Philadelphia and Greater Delaware Valley announced that the Evzones, the Presidential Guard of Greece will be participating in the Philadelphia Greek Independence Day Parade on March 20.

Video

Woman Fatally Shot while Pushing Stroller on Upper East Side

NEW YORK — A 20-year-old woman was fatally shot Wednesday night while she pushed her infant daughter in a stroller on the Upper East Side, police said.

Enter your email address to subscribe

Provide your email address to subscribe. For e.g. abc@xyz.com

You may unsubscribe at any time using the link in our newsletter.