The Bank of Cyprus` (BOC) Board of Directors will meet on Monday at 10.30 (local time) to decide on increasing the share capital of the bank, after the evaluation of the tenders submitted by qualified investors in a process that ended last Friday.
The Board will decide which of the bids received from the investors will be accepted.
According to CNA sources, the issue of share capital increase is expected to be the first to be discussed at Monday`s Board meeting, which is expected to be long because of the many issues on the agenda.
However, it is likely that the Board will make an announcement immediately after the decision to increase the share capital by €1 billion. The Board will also determine the price of the share.
According to sources the biggest interest for investing in the Bank was demonstrated by foreign hedge funds.
BOC`s capital increase by € 1 billion is expected to lead to an increase of the Bank`s Core Tier 1 ratio from 10.6%, to 14,6%.
The increase of the index is expected to enhance competitiveness and trust in the bank and also the bank`s ability to pass the stress test of the European Central Bank.
At the end of the this first phase of the capital increase, participating investors will enter into firm commitments in respect of their orders and the Bank will call an Extraordinary General Meeting of shareholders, expected to take place in August, to approve the transaction, including the waiving of their pre-emption rights.
Existing shareholders will be able to apply to purchase up to 20% in aggregate of the total number of shares offered to qualified investors in the first phase and at the same price as in phase 1 (the “clawback”). The minimum purchase per investor in the clawback will be €100,000 and all existing shareholders (whether or not qualified investors) will be eligible to participate.