The difficulties in finding a solution to the recapitalization of Greek banks postpone the normative act of the Council of Ministers to April 20, which will determine the manner and conditions for implementing this recapitalization.
Greek Prime Minister Lucas Papademos is in Cyprus, on an official visit. From there he said that the recapitalization issue will be resolved by April 20.
Meanwhile meetings are continuously being held between the management of Greek banks and the Ministry of Finance, the Bank of Greece and the supervisory Troika in connection with the recapitalization.
The big issue for Greek bankers is that banks should remain Greek. They also note that the negotiations are in a particularly "decisive phase".
According to sources, the representatives of the International Monetary Fund demonstrate the most certain position during the negotiations, while most moderate are the representatives of the European Central Bank.
Again, according to sources, it seems that banks, the government and the Troika have agreed on the issue of the rights of warrants, aiming at the repurchase of shares, which will be controlled by the European Financial Fund for Stability and not by old shareholders, as provided by the law. The market is prepared to accept a 1 to 3 rate (each share will be entitled to a repurchase of 3 shares by the European Financial Fund for Stability). Negotiations continue on the question of whether credit institutions will have the exclusive right to reclaim all shares, which will be passed on to the European Financial Fund for Stability.
Moreover, bankers exert pressure, in order to ensure the participation - under favourable conditions – of nearly 650,000 small shareholders during the forthcoming increases in share capital.
Bankers have stated clearly that they will not allow small shareholders to be treated by the Troika as small holders of bonds, who have lost 53 percent of their investments during the Greek debt haircut.
They also note that in order to acquire as less capital as possible from the European Financial Fund for Stability, the increase in share capital will have to be successful, and this will not happen unless major shareholders are encouraged to participate and major investment companies, which will mean maintaining the private nature of Greek banks. For these reasons, bankers insist that the price by which share capital of each bank will increase should be the same as the price at which shares will be bought by the European Financial Fund for Stability.
Meanwhile, Greek banks have already taken actions, which are included in their capital plans, which will be presented to the Bank of Greece. These plans will increase their capital and relieve liquidity to the parent bank.
In particular, the start of subsidiary banks sale abroad was made by Eurobank through the sale of its subsidiary bank in Poland - Polbank. Moreover, in a statement Eurobank notes that it is very close to selling the Turkish Eurobank - Tekfen, and adds that "the details of the deal will be announced at the signing of the contract." With the sale of its second bank abroad Eurobank rapidly implements the program for withdrawal and increase of capital by freeing a considerable amount of liquidity for the parent bank.
According to sources, negotiations between Eurobank and Kuwait Burgan Bank are advancing and the Central Bank of Kuwait has approved the purchase request. The consultant of Burgan Bank is Citigroup, and the consultants of Eurobank Tekfen are the British Barclays and U.S. Goldman Sachs.
For its part, Piraeus Bank is close to selling its subsidiary bank in Egypt. The price of the subsidiary bank amounts to 200 million Euros. According to sources from Reuters, there are five candidates interested in buying the subsidiary bank in Egypt and these are banks headquartered in the Middle East and North Africa. In the Middle East they are mainly banks in Kuwait and Qatar and in North Africa, banks in Algeria and Morocco.
Negotiations are underway, but immediate sale of the bank is not expected, mentions Reuters. Piraeus Bank also wants to sell its subsidiary bank in an attempt to increase liquidity and capital, following the established plan for recapitalization.
ΑΤΕbank provides for the sale of companies abroad that are not related to banking. In particular ATEbank has already sold ELVIZ company (Greek company producing animal food) and is participating in tenders for the state company "Hellenic Sugar Industry" and dairy company "Dodoni".
As for the tobacco company "SEKAP" the tender failed, and an Indian company is starting the procedure again.
In turn, the management of the National Bank has already prepared a plan for recapitalization and expressed an intention to sell the "Asteras" hotel in Vouliagmeni and 30 percent of its subsidiary bank in Turkey.