Alpha Bank joins cash call run
Alpha Bank, Greece’s third largest lender, will issue new shares and repay almost €1bn (£914m) of state support in a move to cut ties with government and resume paying dividends.
A three-for-10 rights issue will raise €986m to redeem €940m of preferred shares the bank sold the government earlier this year. The deal is expected to be completed before May 2010.
Alpha joins a raft of other lenders raising cash to repay state aid taken on at the height of the financial crisis. France’s BNP Paribas and Societe Generale have announced cash calls for a combined €12bn to repay state support. Austria’s Erste Group Bank is planning to raise at least €1bn in early November, sources have said, but that will be used mainly to boost capital.
Italy’s UniCredit and Intesa Sanpaolo last month snubbed government help and Lloyds and Royal Bank of Scotland are expected to raise billions to limit the state’s shareholding.
Alpha’s cash call at €8 a share – a 32.9 per cent discount to the theoretical ex-rights price on 16 October – is expected to be completed by early December.
The rights issue will be underwritten by a syndicate of investment banks with JP Morgan the global coordinator and joint bookrunner, joined by BofA Merrill Lynch, Morgan Stanley, Deutsche Bank, Citi, Nomura and UBS. Alpha said it expects the issue to boost its core Tier 1 ratio, which stood at 9.1 per cent at end-June, by 200 basis points.