Cyprus Mail

Plan for bondholder compensation next month

Bondholders corner chairman of the Bank of Cyprus board Christis Hassapis before the meeting

By Angelos Anastasiou

President Nicos Anastasiades has given instructions for an out-of-court settlement plan to be drawn up to compensate Bank of Cyprus and now-defunct Laiki Bank bondholders who saw their holdings vanish as a result of March 2013 Eurogroup decisions, bondholders’ association chairman Fivos Mavrovouniotis said on Tuesday.

Following a meeting chaired by Anastasiades at the Presidential Palace with the Governor of the Central Bank, the finance minister, the chairwoman of the Cyprus Securities and Exchange Commission, and the chairman of the board of Bank of Cyprus, Mavrovouniotis thanked the President for his “substantial interest in resolving our problem.”
He added that Anastasiades has issued instructions for an out-of-court settlement plan to be formulated as soon as possible, so that “everyone is satisfied with a symbolic solution that the President believes can be reached.”

“We will return to hear the proposal that will be prepared so that we can proceed to implementing it,” Mavrovouniotis said.

Asked to elaborate on the nature of the proposal, he said that in addition to the association’s own views, Anastasiades himself submitted some “very serious thoughts and proposals” that will be processed by the competent authorities, with a view to having a complete proposal by early October.

“We believe this effort will help resolve this problem,” Mavrovouniotis said. “It will probably incur some cost, given that we are experiencing a terrible financial crisis, but I believe there is room for bonds maturing over time at some interest to be issued to bondholders.”

He claimed that Anastasiades has been “convinced that we have fallen victim to fraudulent banking practices.”
Asked whether he left the Palace confident that a solution is imminent, Mavrovouniotis answered in the affirmative.

“Indeed, we are today more confident than after any other meeting we have had, because we heard the President issue instructions for the preparation of an out-of-court settlement proposal as soon as possible,” he said.

The bondholders’ leader said his association’s members have lost a total of €1.2 billion sunk into both banks, but the figure includes institutional investors who are treated differently to private investors. Bondholders claim they had been duped into investing in products that promised extraordinarily high yields.

“I believe they, too, have a right to compensation, and the power to claim it,” he said. “We will fight and work for all who have been wronged.”

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