The Bank of Cyprus, the island’s largest lender, has completed a 1 billion euro (US$1.34 billion) capital increase in a private placement to help it restructure following a haircut on deposits last year.
The bank announced late on Monday the successful placement of 4.2 billion new ordinary shares at a price per share of 0.24 euros.
“Shares were allocated to a broad range of institutional investors from Europe, North America and Russia, including a number of international investors introduced by WL Ross & Co LLC and the European Bank for Reconstruction and Development,” the Bank of Cyprus said.
Existing shareholders will be able to acquire up to 20 percent of the shares offered in the private placement scheme, with the initial allocation adjusted in line with their subscriptions.
The increase will take the bank’s core Tier 1 capital to 15.1 percent from its present level of 10.6 percent.
The bank said the capital injection will help it restructure more quickly, withstand upcoming EU bank stress tests and help stimulate a recovery of Cyprus’ recession-hit economy.
“The success of the private placing demonstrates the confidence that international institutional investors have in the bank’s turnaround and the economic recovery in Cyprus, only a year after the bank exited resolution status,” bank chief executive John Hourican said.
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