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Hellenic-Co-op deal will require another €1.5bn in government bonds – reports

By Stelios Orphanides

Hellenic Bank will receive almost €1.5bn in government bonds as part of the agreement to acquire the Cyprus Cooperative Bank’s operations, Haravgi reported on Friday without citing a source.

The government will issue a €650m bond in exchange for loans granted to the local administration which Hellenic does not wish to acquire, Haravgi, the Akel-affiliated newspaper said on its website on Friday. Hellenic will receive another €800m bond in exchange for loans that are likely to become non-performing.

On Friday morning, a representative of Etyk, the bank workers union, revealed more details about how the deal will affect the state-owned bank, into which Cypriot taxpayers pumped already more than €4bn over the past four years.

Christos Panagides, secretary-general of Etyk said in an interview to state-radio CyBC that the Hellenic will take over about 1,100 of the Co-op’s staff totalling 2,650 while another 900 will have to retire by benefiting from a voluntary retirement scheme. The rest, he said, will continue working for the body that will remain in place after the deal which will manage the bank’s non-performing loan portfolio which accounts for roughly six tenths of the total.

Panagides said that late on Thursday, the union received an invitation to meet the administration of the Co-op today which the Etyk may accept.
Minutes later, Andreas Matsas of SEK, said also on CyBC that his union jointly with PEO and Pasydy requested that meeting, revealing a probable rift in the unions’ tactics.

On Friday, Politis reported that the council of ministers will have to approve the transaction after the submission of the proposal by Hellenic Bank. The latter, the newspaper added that Hellenic may need an up to €250m capital increase to complete the transaction which will be carried out with a €150m cash injection and the recognition of €100m in negative good will.

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