April 4, 2013 / 2:26 PM / in 5 years

UPDATE 1-Greece's Piraeus Bank plans 400 mln euro share offering

(Adds details, background)

ATHENS, April 4 (Reuters) - 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 Hepinstall)

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