Laiki bank’s main assets will be sold by the end of the year, MPs heard on Wednesday, as concerns were raised over a recent sale of shares in the Bank of Cyprus (BoC).
Resolution authority official Michalis Stylianou said the current value of the bank’s assets was estimated at €300m, compared with €600m in March 2013 when it was decided to shutter the lender, the island’s second biggest, as part of Cyprus’ bailout.
The biggest drop, according to Stylianou, concerned the investment in BoC shares by €250m, to €130m.
Earlier this month, the authority sold half its BoC shares – €21.5m – or 4.8 per cent stake, at a price of €3.05 each, fetching some €62.5m.
The resolution authority defended its action, arguing that it acted on the advice of the investment banks appointed by the administrator for this purpose.
Members of the House ethics committee heard that the price was good, according to the consultants.
Special administrator Kleovoulos Alexandrou said when he took over there had already been an agreement with HSBC and Deutsche Bank for guidance on selling 9.6 per cent of the BoC stake.
The consultants were clear that the best time was immediately after the BoC share floated on the London stock exchange in January and publication of its financial results the following month.
Alexandrou said experts had congratulated them on the sale but regretfully he has also received threating phone calls.
He said they sold half the shares to disperse the risk. The rest of the shares will be sold later, he said.
Regarding the rest of the assets, Alexandrou said they expected the sale of the Ukrainian subsidiary to be completed by the end of June, pending the approval of the country’s central bank.
A deal to sell the Romanian subsidiary to the Bank of Beirut did not go through because it was not sanctioned by Lebanon’s banking supervisor.
A second effort was underway and there were five interested parties, MPs heard.
In the next few days they expected to issue invitations of interest for the acquisition of Investment Bank of Greece.
Of the subsidiary in Malta, Alexandrou said five investors were interested and the deal was expected to close by July.
The association of the lender’s depositors who lost everything over €100,000, said they were against the sale of the Malta subsidiary, IBG, and the BoC shares.
Chairman Adonis Papaconstantinou said it appeared the administrators were selling assets that were easy to sell instead of the problematic ones.
“We haven’t been convinced about the adequacy of the actions of the resolution authority,” he said.
