Cyprus Finance Minister Haris Georgiadis clarified the situation with the sale of the Cyprus Cooperative Bank. According to the minister, the bank is not for sale, but is looking for investors: "The government does not sell any shares of the Cooperative Bank belonging to it," Georgiadis said, noting that the institution needs to raise capital, which is why the search for investors was announced.
Responding to criticism from a number of political parties, primarily the opposition party ACEL, Georgiadis said that this measure is necessary to ensure the financial stability of the bank and that it will not affect its depositors, but will solve the problem of non-performing loans.
Asked about what would happen if investors refused to buy out the bank's unserved loan portfolio, the minister said: "This will be tantamount to creating a management organization - that is, something that has been recommended by the government and political forces for some time - that will have its price, but and its advantages. "
Recall that 19 March Cooperative Bank announced the search for investors. They are offered two options - the acquisition of the bank as a licensed financial institution, or the acquisition of all or part of its assets and liabilities. Other Cypriot banks can take advantage of the second option. The process, led by Citigroup Global Markets Ltd, will end on 29 March. After that potential investors will be able to submit preliminary applications.
In the light of this news, on 20 March, the trade unions of the SEC, PEO and PASIDI demanded that the rights of the bank's employees be respected in any outcome and categorically declared the impossibility of any programs for forced retirement or dismissal.
As the head of the Strategic Development and Communications Service of Kopa, Yannis Stavrinidis, said in the radio interview of Suws, two variants of the development of events are possible. According to the first, the bank's share capital will be increased. Thus, the future investor will be able to buy additional shares and become a shareholder (the bank has no right to independently sell a state stake in its capital). In this case, the investor will monitor the bank's balance sheet, including operating activities and the entire amount of unearned debt.
In another scenario, investors can purchase the operating activities of the bank - all operations, offices and personnel - except for non-serviced debts. The state at the same time will raise funds for the "good" part of the bank and will remain the owner of the "bad" - that is, of all overdue loans.
Later, the investor will have the opportunity to absorb Coop or to merge with another banking institution.
Stavrinidis also recalled that the reduction of the state's share in the Cooperative Bank was one of the conditions for the nationalization of the institution in 2012-2013.
Meanwhile, local media report that a number of Cypriot banks have already shown interest in Co-op, including the Bank of Cyprus, Hellenic and Eurobank, as well as several investment funds from Canada and China.