THE Bank of Cyprus said yesterday it planned a bonus issue for shareholders and that it also intended to spin off its property flagship Kermia.
The bank, Cyprus’ largest, also unveiled plans to create a venture capital firm in Cyprus and set up a mutual funds company, ahead of legislation on the matter expected to be passed by parliament soon.
The decision to issue shareholders one bonus share for every five held was taken yesterday morning by the bank’s board, group chairman Solon Triantafyllides told an annual general meeting in Nicosia. The proposal will need ratification by shareholders at an extraordinary general meeting to be convened on October 4.
Triantafyllides said Kermia, a group of companies dealing with real estate and investments, would be spun off. The group is comprised of Kermia Ltd., Kermia Properties and Investments Ltd., and Kermia Hotels. The precise method of spinning the units off would be decided soon, he said.
The bank has applied for a dual listing of its shares on the Athens Stock Exchange. Triantafyllides did not give a specific date for the listing, contrary to rumours which circulated on the Cyprus Stock Exchange this week. "What is important is that Bank of Cyprus will be the first foreign company which will make its debut on the Athens Stock Exchange. One could not expect that the authorities of Greece could be more specific, especially right now, because of the current circumstances there," he told shareholders.
Investors ditched shares the last time the bank failed to give a firm date for its Athens listing, but it has since rebounded. It was up two cents to nine pounds on the local bourse yesterday.
Triantafyllides reiterated that the date of the bank’s debut in Athens was not important. "What is is the success of the issue on the one hand and the way the capital will be utilised on the other," he said.
On Tuesday, Bank of Cyprus announced that they had entered a preliminary agreement to take over Interbank, a small US-based bank, for 43 million dollars. Bank officials have said the move was incorporated in the bank’s strategy to utilise the funds they will raise in Greece.
The bank plans an initial public offering of its shares in Greece to the equivalent of 12 per cent of its share capital, or up to 39 million shares with a nominal value of 0.50 Cyprus pounds.
The actual amount the bank plans to raise in Greece depends on its share price in Cyprus when the listing period approaches, though local dealers say it could be anything between 300 and 400 million pounds ($490-660 million).
The Athens Stock Exchange has a long list of companies waiting to make their debut on the market. Bank of Cyprus filed its application for a listing on December 22 1999.
