The co-op bank reiterated on Wednesday that the recent invitation to investors aimed at increasing its share capital and not to sell the state’s shares in the lender.
“We had said it in the summer that we had hired Citigroup to start the procedure,” said Yiannos Stavrinides, head of the co-op’s strategy and communications service. “We are implementing our programme and nothing else.”
The co-op bank was recapitalised with €1.67bn in taxpayer money in 2014 and 2015, but it is struggling with some €6.4bn in non-performing loans, accounting for more than half of its loan portfolio.
Since Monday, when the co-op announced it was opening a virtual data room so that potential investors could access information, the government has been under heavy fire from political parties for “selling-off” the bank.
“It’s no different from the pledge we made since the restructuring plan, which was to reduce the state’s participation,” Stavrinides said.
He said it will be a transparent procedure with satisfactory participation that proved the reforms made had given value to the co-op.
“We hope this value will be reflected by the interest shown by investors,” Stavrinides added.
The virtual data room to be used by potential investors to securely exchange data and analyses, as the lender seeks to reduce the state’s share.
The process launched by the bank has two parts, one offering the choice of acquiring the co-op as a licensed entity, or part of, or all its assets and liabilities.
The process will close on March 29. After that, potential investors will be given time to submit binding offers
Stavrinides said the data room contained 65,000 pages of documents with data about the bank, a fact that “proves it not a spur-of-the-moment decision but a very well-prepared exercise.”
“We started the procedure on Monday to attract investors into the bank’s share capital, which is done by increasing the share capital and not by selling state shares,” he said.
The co-op official said the management was not seeking to split the lender into a ‘good’ and ‘bad’ bank.
“The basic scenario is participation in the share capital by increasing the share capital.”
Stavrinides said the process was well prepared to ensure stability and continuity the day after and there was nothing that could affect the workers.
Earlier, bank worker union Etyk, threatened to strike, claiming the co-op had not informed them about the development.