PARIS (Reuters) - French bank Credit Agricole (CAGR.PA) said on Thursday it would cut its 18.3 percent stake in investment fund Eurazeo (EURA.PA) by selling shares and convertible debt, bolstering its balance sheet to help meet tougher capital demands.
Credit Agricole - Eurazeo’s single biggest shareholder - said it would sell at least 3.2 million Eurazeo shares via a private placement and separately sell zero-coupon bonds that would be convertible into a maximum of 5.1 million Eurazeo shares.
The placement represents around 179.2 million euros ($241.23 million) and the bond sale up to 285.7 million euros’ worth of Eurazeo stock, using Thursday’s closing price of 56.01 euros per Eurazeo share.
France’s third biggest bank Credit Agricole, like banks across Europe, has sold assets and cut costs to strengthen its balance sheet as tougher curbs on banks’ risk-taking under new global rules known as Basel III take effect. It has sold shares in Spain’s Bankinter (BKT.MC) and exited operations in Greece.
Banks are also gearing up for a Europe-wide health check on the sector next year run by the European Central Bank.
Eurazeo, whose investments include Rexel (RXL.PA), car hire company Europcar and clothing brand Moncler, has a market capitalization of 5.2 billion euros, according to Thomson Reuters data. Credit Agricole currently owns 12.5 million shares, worth about 700 million euros.
Credit Agricole was a key player in the creation of Eurazeo in the early 2000s from a web of holding companies owned by investment bank Lazard. Eurazeo sold its own shares in Lazard when the investment bank floated on the stock market in 2005.
($1 = 0.7429 euros)
Reporting by Lionel Laurent; Editing by James Regan and Jane Merriman