Alpha Bank Plans $ 1 Billion Share Issue to Operate Stimulus Projects
Band George Georgiopoulos
LONDON, May 24 (Reuters) – Alpha Bank ACBr.AT, one of Greece’s four largest lenders, plans to raise around 800 million euros ($ 975 million) in a sale of new shares to capitalize on lending opportunities in the country as stimulus funds from the European Union will be pouring in, he said on Monday.
The strategy update helped the bank’s shares rebound after falling around 30% on Friday, rising 8.1% to 0.9764 euro at the start of trading on Monday.
The planned sale of shares will take place through a bookbuilding with international institutional investors and a public offering in Greece, which is expected to close in mid-July, the bank said.
Alpha Bank, about 11% owned by Greek bank rescue fund HFSF, said current shareholders’ pre-emption rights on the offer would be waived but priority would be given to existing shareholders.
The Hellenic Financial Stability Fund (HFSF) will participate to the extent of its current participation.
Alpha Bank envisions investment-led growth and wants to be well positioned for it.
“Greece will soon benefit from a one-off influx of European funds which will significantly boost the economy,” CEO Vassilis Psaltis said in a statement.
He said Alpha Bank expects significant investments in clean energy, digitization, real estate, tourism and infrastructure. The capital increase will help it to develop “as the first banking partner in this transformation”, he added.
Greece formally submitted its national stimulus package to the EU last month, hoping to boost economic growth by up to seven percentage points over the next six years.
As part of the multibillion-euro stimulus package agreed by EU leaders last year, Athens is set to receive € 18.2 billion in grants and € 13 billion in cheap loans over the course of over the next few years, or about 16% of its gross domestic product.
Goldman Sachs and JPMorgan will act as joint global coordinators and joint bookkeepers for the offering, with Citigroup the lead joint bookrunner and Barclays and Axia Ventures as joint bookkeepers.
Alpha Bank, with a Core Equity Tier 1 ratio of 16%, recorded a loss of 282 million euros ($ 343.98 million) in the first quarter, compared to 29.7 million in the same period last year, after the increase in loan loss provisions. 31.4% to 390.6 million euros.
The bank said most of the impairment charge resulted from the blow to sales of non-performing loans in Cyprus.
($ 1 = 0.8198 euros)
(Report by George Georgiopoulos and Lefteris Papadimas edited by Mark Potter and David Goodman)
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