Cyprus Mail

‘Legacy Laiki’ sale a headache for administrators

By Angelos Anastasiou

A ROADMAP for the disposal of former Laiki bank’s assets has been presented by the bank’s Special Administrator Andri Antoniades to the troika delegation and to the Resolution Authority comprising the finance minister, the Central Bank governor and the president of the Cyprus Securities and Exchange Commission.

The list of assets include the voting rights acquired in the Bank of Cyprus (BoC) as part of the conversion of uninsured deposits in the now-defunct bank into Class A shares, adding up to 18 per cent of BoC’s capital composition and making legacy Laiki its single biggest shareholder.

Although the list of Laiki’s assets and their value has not been made public by the administrator, reports suggest the value of the voting rights could be €500m.

The updated memorandum of understanding agreed with the troika of international lenders (European Central Bank, European Commission and International Monertary Fund) in November 2013 offers specific guidelines on the management of ‘legacy Laiki.’

In addition to setting a deadline for the presentation of “a detailed roadmap for the full disposal of legacy Laiki’s assets” at end-January 2014, the updated MoU also provides that the interim management of the 18 per cent voting rights be assigned to a well-established house until such time as they can be made available to investors.

“Pending disposal of legacy Laiki’s shares in BoC and to ensure their adequate management, the Resolution Authority will instruct the Special Administrator to entrust by end-January 2014, the voting rights of these shares to a well-recognised and independent consulting or auditing firm or an international institution,” the MoU article reads.

Despite the deadline having been set at end-January, an “independent consulting or auditing firm or an international institution” to take over the voting rights has not yet been announced, with Antoniades expected to focus on the matter as soon as the roadmap for the disposal of all assets has been finalised and approved.

In addition to entrusting an internationally respected house with the interim management of legacy Laiki’s voting rights in the BoC, the Special Administrator will undertake finding investors to buy the asset.

Reports say that some interest by foreign investors has been noted, but not from any of the internationally prominent brand-names whose interest – in itself – to invest in the BoC would foster confidence and add value to the bank.

Yesterday’s comments by Economics Nobel laureate and National Economic Council president Christoforos Pissarides addressed the need for serious investor interest in the BoC.

“It is very important to create the circumstances that will attract large investments, mostly for the BoC. If an investor is found that will look upon the BoC as favourably as other investors have looked upon Hellenic Bank recently, the banking sector’s problems will resolve themselves at once”, he said.

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