Greek Eurobank's capital boost to be priced at discount
ATHENS Oct 30 (Reuters) - Greece's plan to return Eurobank to the private sector will see the lender issue new shares to investors at a discount to the price the country's bank rescue fund paid to recapitalise it, the head of the fund said on Wednesday.
Greece faces a March 2014 deadline laid down by the EU/IMF officials overseeing its bailout to return Eurobank to the private sector, either fully or partially.
The lender was the only one of Greece's four systemically important banks to have its recapitalisation needs met solely by the Hellenic Financial Stability Fund (HFSF) in the summer, with no private-sector participation.
The HFSF, a bank rescue vehicle funded with 50 billion euros ($68.85 billion) from the country's bailout by the European Union and International Monetary Fund, owns 95 percent of Eurobank, Greece's fourth-largest lender.
The rescue fund pumped 5.84 billion euros into Eurobank in a share issue in June to restore the lender's capital ratio to close to 9 percent. It subscribed for the entire issue, at 1.54 euros a share.
"The price of the new share issue will be lower than the price (of the shares bought) in the recapitalisation," HFSF Chief Executive Anastasia Sakellariou told reporters.
The new share issue will be aimed at institutional investors, rather than the smaller retail investors who own the 5 percent of the bank not held by the HFSF.
A source close to the planned transaction told Reuters last month that Eurobank would issue more than one billion euros of new stock to private investors.
Sakellariou said Eurobank's management had estimated the bank's capital needs at around 2 billion euros, but the final figure will be determined after the completion of new stress tests by the Bank of Greece by the end of this year.
The fund will be flexible regarding Eurobank's capital boost, meaning it may participate in part, fully or not at all, she said. But the HFSF will not sell existing shares it owns.
It has not been announced when the share issue will take place.
Eurobank has a current market value of 2.77 billion euros. Its shares were up 1.2 percent at 0.69 euros in late Wednesday trading.
"We want to attract serious investors," HFSF Chairman Christos Sklavounis said. "We want the share issue to be mostly taken up by the private sector, if we see that it will be to the fund's benefit to take part, we will." (Reporting by George Georgiopoulos; Editing by Pravin Char)