Cyprus Mail

Bondholders seeking out-of-court settlement

By Angelos Anasatasiou

The bondholders’ association has adopted a strategy of seeking an out-of-court settlement, its chairman Fivos Mavrovouniotis said yesterday.

At a news conference, the association’s head described bondholders’ suffering as “dramatic” as the very survival of some has come in question.

“We receive tens, maybe hundreds, of phone calls from bondholders daily, and they are literally perishing,” he said. “I can assure you, they call us in the middle of the night, I have personally taken phone calls at three in the morning, because some people are so frustrated that they can’t afford to live decently, or put a roof over their heads, or buy their medicine – some even pull their kids out of their studies. The authorities can’t sit back and watch people perish. Such indifference is criminal.”

Mavrovouniotis warned that while the association has afforded some time to the all involved, drastic measures will ensue if bondholders’ issues are not addressed.

“If we see that this indifference or mockery continues we will have to revolt, and our revolt will be unprecedented in Cypriot annals,” he said. “We expect a meeting to be convened at the Presidential Palace.”

“We expect action, we have heard enough words,” he added.

He pointed out that there was now a window of opportunity to settle this matter out of court as they have been informed that the Bank of Cyprus is keen on such resolution by chairman Christis Hassapis, while Central Bank governor Chrystalla Georghadji told them recently that she planned to submit a proposal to this effect.

“In our recent meeting with Mr Hassapis and [CEO] Mr Hourican they told us something they had never said before – that they are interested in an out-of-court settlement,” Mavrovouniotis said.

The association’s vice-chairman Stavros Yiallourides said that bondholders were unable to cope with the cost of a protracted legal battle that, since they were initially assured that it would last one year but have now been told it might take up to ten years.

“In a semi-occupied country, mockery has become a national sport,” he said.

But although the BoC, according to Mavrovouniotis, may be willing to negotiate an out-of-court settlement, it accepts no responsibility for ex-Laiki bank’s bonds which remain with legacy Laiki, unlike the failed lender’s bond-collateralised loans that were carried over to BoC.

Still, association representative, Leontios Hadjivasilis, said the group is willing to discuss a private arrangement that would settle the matter over time.

According to the association, total bonds held added up to a total of €1.1 billion, of which €522 million were BoC bonds and €626 million Laiki bonds.

Of these, bonds bought by private concerns – as opposed to institutional investors – were €753 million. Excluding bond-connected loans amounting to €200 million, the value of total bonds for which compensation may be required is reduced to €553 million.




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