* Fairfax, others bid for 47 pct of Eurobank share issue
* Group offers 0.30 euros a share, a 25 pct discount
* Move shows Greece back on investor radar screens
(Recasts with bailout fund picking Fairfax)
By George Georgiopoulos
ATHENS, April 15 International investors are to
invest 1.3 billion euros ($1.8 billion) in Eurobank
to become the bailed-out Greek bank's biggest shareholders in
another sign of growing market confidence in Greece.
The country's bank bailout fund HFSF has picked an
investment group led by Canada's Fairfax as anchor
investors in a share sale needed to plug Eurobank's 2.86 billion
euro capital shortfall.
Eurobank, Greece's third-largest bank and 95-percent-owned
by the HFSF, is issuing new shares to help to plug the gap
revealed last month in a central bank stress
The investors' cash will reduce the strain on the Greek
government's resources. The less the HFSF spends to replenish
Greek banks' capital, the lighter and more manageable the
country's debt load becomes.
If Eurobank raises the full 2.86 billion euros from markets
this means the HFSF, endowed with 50 billion euros by the
European Union under Greece's international bailout, will not
have to dip into its remaining 11 billion euro capital buffer.
Eurobank's fundraising plan comes days after Greece's
government broke a four-year exile from debt markets with a
landmark sale of five-year bonds that raised 3 billion euros.
The bank, with a market value of 2.19 billion euros, follows
Alpha and Piraeus, in tapping investors to
bolster its equity. National Bank, the country's
largest, is also considering a fundraising.
The group of investors, which includes Fairfax, Capital
Research and Management, Wilbur Ross, Fidelity, Mackenzie and
Brookfield, committed to subscribe to 47 percent or 1.33 billion
euros of Eurobank's equity offering at 0.30 euros a share, a 25
percent discount to Tuesday's closing price of 0.40 euros.
Capital Research and Management pledged about 557 million
euros for the deal, the largest chunk of the bid. Fairfax signed
up for 400 million euros.
Fairfax and Wilbur Ross made a commitment to hold on to the
shares for at least six months and said they would actively
participate in Eurobank's management.
The HFSF's chief executive said interest by quality
investors reflected the turnaround of Greek banks. "We are
looking forward to the full coverage of the share capital
increase with private participation at the final price which
will be determined via the book building process," Anastasia
Sakellariou said on Tuesday.
Current shareholders, including the HFSF, will waive rights
to the share issue, which will dilute the rescue fund's stake
'CANADA'S WARREN BUFFETT' COMES TO GREECE
The deal confirms a trend of overseas funds placing small
investments in the bailed-out country, betting on a recovery
from its deepest postwar economic slump.
It also marks the third major Greek investment by Fairfax,
which is controlled by investor Prem Watsa - known as the
"Warren Buffett of Canada".
Fairfax has invested in Eurobank's real estate unit
and acquired a 5 percent stake in Mytilineos
, one of the country's biggest mining and energy
Billionaire investor Wilbur Ross told Reuters last week he
was assessing distressed assets in southern European countries
such as Greece and looking to make some investments in the next
Barclays, Deutsche Bank and JP Morgan
will lead the bookbuilding process aimed at
international investors. About 10 percent of the new shares will
be offered to domestic investors, the bank's board has said.
($1 = 0.7238 Euros)
(Editing by David Goodman and Jane Merriman)