The second largest banking institution in Greece, Piraeus Bank, obtained shareholder approval last Tuesday for a Eur7,33 billion or US$9.55 billion share issue. With the approval, the board is fully confident in its ability to achieve the required private participation in the sale to avoid being nationalized.
The recapitalization plan was approved during the latest shareholder meeting in order to restore the bank's solvency issues after it had sustained losses due to sovereign debt write downs and bad loans.
The plan forecasts the accumulation of Eur400 million from private share placements and up to US$6.94 billion from a sale of issued rights. Piraeus had already obtained clearance to raise Eur2 billion in CoCos or contingent convertible bonds.
The Greek government had agreed with international lenders that at least 10% of equity issuances from its banking community must be purchased by the market to be allowed to retain their privately owned status.
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