* Just over 87 pct of shareholders at meeting approve issue
* Shares priced at 0.24 euros apiece
* Issue takes core Tier 1 capital to 15.1 pct from 11.3 pct
(Recasts first paragraph, adds detail, share listing plans, CEO
By Michele Kambas
NICOSIA, Aug 28 Shareholders who became the Bank
of Cyprus's reluctant owners when it seized their
deposits last year approved plans for a 1 billion euro ($1.3
billion) share issue, designed to bolster it ahead of the
announcement of which EU banks need more capital to withstand
The European Bank for Reconstruction and Development (EBRD),
partly owned by the European Union, and investors represented by
U.S.- based billionaire Wilbur Ross, were among those signing up
for the issue pricing Bank of Cyprus shares at 0.24 euros apiece
which will dilute the original shareholders.
Just over 87 percent of shareholders present at a meeting in
Nicosia on Thursday approved the motion. Turnout was 42 percent.
"Strengthening our bank ... no doubt will allow us to
accelerate its recovery (and) we will be able to engage with the
wholesale markets more easily," the bank's Chief Executive John
Hourican told shareholders.
The issue will take the bank's core Tier 1 capital, a key
measure of its financial strength, to 15.1 percent from 11.3
percent, well ahead of the minimum required in the EU-wide tests
whose results will be announced in mid-October.
"There's no certainty we can give (that we will pass the
tests)," Hourican told Reuters in a telephone interview. "All we
can say is that at least we are well placed heading into the
stress tests ... We don't know the results."
The issue, which executives said was the single largest
foreign investment ever made in Cyprus, would allow the bank to
accelerate a restructuring plan after it was almost crippled by
the onerous terms of a bailout for Cyprus in early 2013.
Hourican said his main priority was to keep up the momentum
the bank has achieved in recent months, which it plans to do by
tackling its large stock of non-performing loans and regaining
access to market funding.
Legislation going through the Cypriot parliament next week
could be a "game changer" for how banks can engage with
defaulting borrowers, he said, adding it was too soon to say
what the financial impact for Bank of Cyprus would be.
He still hopes the bank can issue a bond in September.
Bank executives said the issue would allow the lender to
re-submit a prospectus to bourse authorities for a re-listing of
its shares, which have been suspended from trading on the
Cypriot and Athens exchanges since March 2013. "We expect that
to happen within weeks," Hourican said.
Bank of Cyprus made history in the euro zone's debt crisis
when it became the first bank forced to convert uninsured
deposits into equity, a condition for Cyprus to receive 10
billion euros in bailout aid from the European Union and the
International Monetary Fund.
As part of the conversion, about 45 percent of the bank's
shares ended up in the hands of wealthy Russians who previously
held deposits with the lender.
(1 US dollar = 0.7590 euro)
(Additional reporting by Laura Noonan in London; Editing by
David Clarke and David Holmes)