Piraeus Bank SA agreed to sell a majority stake in itsCypriot unit to a company fronted by a long-time Lebanese banker.
Holding M. Sehnaoui SAL will acquire shares in the Cypriotunit from Piraeus Bank and alongside other investors will subscribe to a €40million capital increase by Piraeus Bank Cyprus Ltd. The transactions, whichare subject to regulatory approvals, form part of the group's restructuringcommitments as agreed with the European Commission and will reduce PiraeusBank's stake in the formerly wholly owned unit to 17.6%.
The bank in a follow-up release July 12 provided morespecifics about the nature of the transaction, saying it would sell 26% ofPiraeus Bank Cyprus' 3.4 million outstanding shares to Holding M. Sehnaoui for €3.72per share, or €3.2 million, with the unit then carrying out its €40 millioncapital increase at the same per-share price. After the capital increase,Piraeus Bank will own 2.5 million of Piraeus Bank Cyprus' 14.1 million totalshares.
Holding M. Sehnaoui owns 18.44% of Lebanon's , which ismajority-owned by FransabankSAL. BLC Bank owns 98.83% of Cypriot lender . Maurice Sehnaoui hasbeen chairman of BLC Bank since 2008 and served as chairman and general managerof Societe Generale de Banque auLiban SAL from 1981 to 2007.
The transactions are expected to improve Piraeus Bank'sgroup regulatory capital position by about 15 basis points, which the banknoted July 12 is a reflection predominantly of a €560 million reduction ofrisk-weighted assets. Piraeus Bank Cyprus' regulatory capital position isexpected to exceed 15%.
UBS Ltd. acted as exclusive financial advisor to Piraeus onthe transaction. Norton Rose Fulbright acted as international legal adviser toPiraeus, with Antis Triantafyllides & Sons LLC as local legal adviser.
As of March 31, Nicosia-based Piraeus Bank Cyprus had totalassets of €1.1 billion, net loans of about €600 million, customer deposits of€1.0 billion and total equity of €70 million. It has 19 banking units and about310 employees.