(Adds details, background)
ATHENS, April 4 Greece's No.2 lender Piraeus
Bank said it would raise up to 400 million euros
through a privately placed share offering, representing more
than half the amount the bank must raise to be able to stay
private under a government scheme.
Greece's four major banks need 27.5 billion euros in fresh
funds to restore their solvency ratios to levels required by the
country's central bank after incurring losses from a sovereign
debt writedown and impaired loans.
Most of the funds will be provided by a state bank support
fund - the Hellenic Financial Stability Fund (HFSF) - in
exchange for new shares or contingent convertible bonds (CoCos).
Under the terms of the recapitalisation scheme, at least 10
percent of banks' new common equity must be raised from the
private sector, otherwise they will fall under the full control
of the HFSF fund.
Piraeus bank's capital need has been set by the central bank
at 7.335 billion euros. The 400 million-euro offering represents
about 55 percent of the 733.5 million euros the bank must raise
from private investors to avoid government control.
The bank said existing shareholders will be able to exercise
their rights and take part in an offering of new common shares
for up to the remaining 6.935 billion euros. It will hold a
shareholders meeting on April 12 to seek approval for the plan.
Piraeus has already obtained shareholder approval to issue
contingent convertible bonds for up to 2.0 billion euros.
Rival Alpha Bank, Greece's third-largest lender,
said on Tuesday it will seek to raise 12 percent of the 4.571
billion euro it needs to recapitalise from private investors to
remain privately run.
(Reporting by George Georgiopoulos; Editing by Sonya