PIRAEUS FINANCIAL HOLDINGS S.A.
Piraeus Bank announces its intention to raise €800 million of Capital through a Rights Issue.
This press release is not an offer of securities for sale in the United States. The securities described in the press release will not be registered under the U.S. Securities Act of 1933, as amended (the "US Securities Act") or any U.S. state securities laws and may not be offered or sold in the United States absent an applicable exemption from such registration requirements.
NOT TO BE DISTRIBUTED IN THE US, CANADA, AUSTRALIA OR JAPAN
Athens, 29 October 2010
The Board of Directors of Piraeus Bank (hereafter the "Bank") is today announcing its intention to proceed with a capital increase in cash via the offering of pre-emptive rights to existing shareholders, for approximately €800 million (the "Rights Issue"), subject to shareholders' approval at the EGMs (as defined below).
The Bank has received underwriting commitments, subject to customary conditions, in respect of the full amount of the Rights Issue from Barclays Capital, Credit Suisse, Goldman Sachs International and Morgan Stanley, which will act as Joint Global Coordinators ("JGCs") for the Rights Issue. The subscription price for the capital increase will be determined prior to the launch of the Rights Issue (expected to be in January 2011).
The proposed capital increase aims to:
-Strengthen the Bank's capital position in anticipation of a stricter regulatory environment and to fulfill higher investor expectations;
-Enhance the Bank's position in the context of the macro-economic conditions in Greece; and
-Allow the Bank to take advantage of attractive organic growth opportunities in the region.
A capital increase of €800 million would have resulted in pro-forma capital ratios of 9.5% Equity Tier 1 Capital and 10.8% Tier 1 Capital (+200 bps) as of 30 June 2010. As a result, the Total Capital Adequacy Ratio would have reached 11.6%.
The Bank has agreed to a 180-day customary lock-up provision following the date of completion of the Rights Issue.
In order to effect the Rights Issue, the Bank will call extraordinary meetings of the ordinary and preferred shareholders of the company (collectively, the "EGMs"), in order to resolve upon (i) a capital increase by way of a Rights Issue, and (ii) a reduction of the par value of the ordinary shares of the Bank without increasing the number of shares outstanding.
At the same EGMs, the Bank also intends to seek shareholders' approval for the issuance of convertible bonds for up to €250 million with waiver of pre-emption rights, in order to further improve the financial flexibility of the Bank, and to increase the ability to strengthen its capital base as appropriate. The specific terms of any convertible bond offering will be set by the Board of Directors of the Bank prior to the launch of any such offering, which will also be subject to the above mentioned lock-up period.
The EGMs are expected to be convened at the first call on 23 November 2010. Following approval by that or a subsequent repeat EGM, the Rights Issue is expected to be launched in January 2011. The specific terms of the Rights Issue will be set by the Board of Directors of the Bank prior to the its launch.
With respect to the Rights Issue, the Chairman of the Bank, Mr. Michalis Sallas, stated: "This is an important step for Piraeus Bank, allowing us to further strengthen our capital base in the face of a challenging environment, and putting us in a position to benefit from an improvement in economic conditions."
Update on Current Trading
Key trends in the Bank's performance have not changed significantly compared to first half of 2010.
Customer deposits saw positive net inflows (at the level of €300 million) during the third quarter reflecting greater macroeconomic stability. Loans had a small decrease since 30 June 2010, as such improving the loans to deposits ratio by approximately 3 percentage points compared to the end of the first half. ECB funding has remained at the same level as at 30 June 2010.
Net interest income grew by a small amount in comparison with the third quarter of the prior year, primarily as a result of loan book repricing more than offsetting a higher cost of funds. Overall, cost developments are in line with the trends in the first half of 2010 and cost containment is amongst the Bank's top priorities. NPL formation increased over the third quarter, partly due to seasonal trends, thus the cost of risk is expected to be at a marginally higher level compared with the first half of 2010 at around 140-150bps. The Bank's coverage ratio has been maintained at approximately 50%.
Capital ratios have remained at the same level as at 30 June 2010.
Copies of this announcement may not be published, distributed or transmitted in or into the United States. This announcement does not constitute an offer to sell or the solicitation of an offer to buy the securities discussed herein. The securities mentioned herein have not been, and will not be, registered under the US Securities Act, or the laws of any state, and may not be offered or sold in the United States (as such term is defined in Regulation S under the US Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and applicable state securities laws. There will be no public offering of the securities in the United States.
This announcement is directed only at (i) persons outside the United Kingdom, (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") and (iii) high net worth individuals, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (such persons, "relevant persons"). This announcement is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this press release relates is available only to relevant persons and will be engaged in only with relevant persons.
This announcement and any offer of securities to which it relates are only addressed to and directed at persons in member states of the European Economic Area who are "qualified investors" within the meaning of article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC) ("qualified investors") and any relevant implementing measures (the "Prospectus Directive") other than the offer contemplated in the prospectus to be made available in Greece once that prospectus has been approved by the competent authority in Greece and published in accordance with the Prospectus Directive.
BARCLAYS CAPITAL, CREDIT SUISSE, GOLDMAN SACHS INTERNATIONAL AND MORGAN STANLEY ARE ACTING EXCLUSIVELY FOR THE COMPANY AND NO ONE ELSE IN CONNECTION WITH THE RIGHTS ISSUE AND WILL NOT REGARD ANY OTHER PERSON (WHETHER OR NOT A RECIPIENT OF THIS DOCUMENT) AS THEIR CLIENT IN RELATION TO THE RIGHTS ISSUE AND WILL NOT BE RESPONSIBLE TO ANYONE OTHER THAN THE COMPANY FOR PROVIDING THE PROTECTIONS AFFORDED TO THEIR CLIENTS NOR FOR GIVING ADVICE IN RELATION TO THE RIGHTS ISSUE OR ANY TRANSACTION, ARRANGEMENT OR OTHER MATTER REFERRED TO IN THIS ANNOUNCEMENT.
NOT TO BE DISTRIBUTED IN THE US, CANADA, AUSTRALIA OR JAPAN
Piraeus Bank announces its intention to raise €800 million of Capital through a Rights Issue.
Athens, 29 October 2010
The Board of Directors of Piraeus Bank (hereafter the "Bank") is today announcing its intention to proceed with a capital increase in cash via the offering of pre-emptive rights to existing shareholders, for approximately €800 million (the "Rights Issue"), subject to shareholders' approval at the EGMs (as defined below).
The Bank has received underwriting commitments, subject to customary conditions, in respect of the full amount of the Rights Issue from Barclays Capital, Credit Suisse, Goldman Sachs International and Morgan Stanley, which will act as Joint Global Coordinators ("JGCs") for the Rights Issue. The subscription price for the capital increase will be determined prior to the launch of the Rights Issue (expected to be in January 2011).
The proposed capital increase aims to:
-Strengthen the Bank's capital position in anticipation of a stricter regulatory environment and to fulfill higher investor expectations;
-Enhance the Bank's position in the context of the macro-economic conditions in Greece; and
-Allow the Bank to take advantage of attractive organic growth opportunities in the region.
A capital increase of €800 million would have resulted in pro-forma capital ratios of 9.5% Equity Tier 1 Capital and 10.8% Tier 1 Capital (+200 bps) as of 30 June 2010. As a result, the Total Capital Adequacy Ratio would have reached 11.6%.
The Bank has agreed to a 180-day customary lock-up provision following the date of completion of the Rights Issue.
In order to effect the Rights Issue, the Bank will call extraordinary meetings of the ordinary and preferred shareholders of the company (collectively, the "EGMs"), in order to resolve upon (i) a capital increase by way of a Rights Issue, and (ii) a reduction of the par value of the ordinary shares of the Bank without increasing the number of shares outstanding.
At the same EGMs, the Bank also intends to seek shareholders' approval for the issuance of convertible bonds for up to €250 million with waiver of pre-emption rights, in order to further improve the financial flexibility of the Bank, and to increase the ability to strengthen its capital base as appropriate. The specific terms of any convertible bond offering will be set by the Board of Directors of the Bank prior to the launch of any such offering, which will also be subject to the above mentioned lock-up period.
The EGMs are expected to be convened at the first call on 23 November 2010. Following approval by that or a subsequent repeat EGM, the Rights Issue is expected to be launched in January 2011. The specific terms of the Rights Issue will be set by the Board of Directors of the Bank prior to the its launch.
With respect to the Rights Issue, the Chairman of the Bank, Mr. Michalis Sallas, stated: "This is an important step for Piraeus Bank, allowing us to further strengthen our capital base in the face of a challenging environment, and putting us in a position to benefit from an improvement in economic conditions."
Update on Current Trading
Key trends in the Bank's performance have not changed significantly compared to first half of 2010.
Customer deposits saw positive net inflows (at the level of €300 million) during the third quarter reflecting greater macroeconomic stability. Loans had a small decrease since 30 June 2010, as such improving the loans to deposits ratio by approximately 3 percentage points compared to the end of the first half. ECB funding has remained at the same level as at 30 June 2010.
Net interest income grew by a small amount in comparison with the third quarter of the prior year, primarily as a result of loan book repricing more than offsetting a higher cost of funds. Overall, cost developments are in line with the trends in the first half of 2010 and cost containment is amongst the Bank's top priorities. NPL formation increased over the third quarter, partly due to seasonal trends, thus the cost of risk is expected to be at a marginally higher level compared with the first half of 2010 at around 140-150bps. The Bank's coverage ratio has been maintained at approximately 50%.
Capital ratios have remained at the same level as at 30 June 2010.
Copies of this announcement may not be published, distributed or transmitted in or into the United States. This announcement does not constitute an offer to sell or the solicitation of an offer to buy the securities discussed herein. The securities mentioned herein have not been, and will not be, registered under the US Securities Act, or the laws of any state, and may not be offered or sold in the United States (as such term is defined in Regulation S under the US Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and applicable state securities laws. There will be no public offering of the securities in the United States.
This announcement is directed only at (i) persons outside the United Kingdom, (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") and (iii) high net worth individuals, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (such persons, "relevant persons"). This announcement is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this press release relates is available only to relevant persons and will be engaged in only with relevant persons.
This announcement and any offer of securities to which it relates are only addressed to and directed at persons in member states of the European Economic Area who are "qualified investors" within the meaning of article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC) ("qualified investors") and any relevant implementing measures (the "Prospectus Directive") other than the offer contemplated in the prospectus to be made available in Greece once that prospectus has been approved by the competent authority in Greece and published in accordance with the Prospectus Directive.
BARCLAYS CAPITAL, CREDIT SUISSE, GOLDMAN SACHS INTERNATIONAL AND MORGAN STANLEY ARE ACTING EXCLUSIVELY FOR THE COMPANY AND NO ONE ELSE IN CONNECTION WITH THE RIGHTS ISSUE AND WILL NOT REGARD ANY OTHER PERSON (WHETHER OR NOT A RECIPIENT OF THIS DOCUMENT) AS THEIR CLIENT IN RELATION TO THE RIGHTS ISSUE AND WILL NOT BE RESPONSIBLE TO ANYONE OTHER THAN THE COMPANY FOR PROVIDING THE PROTECTIONS AFFORDED TO THEIR CLIENTS NOR FOR GIVING ADVICE IN RELATION TO THE RIGHTS ISSUE OR ANY TRANSACTION, ARRANGEMENT OR OTHER MATTER REFERRED TO IN THIS ANNOUNCEMENT.