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Alpha Bank shares soar on recapitalisation deal

Third-biggest lender to stay in private hands after attracting 10% investment

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Alpha Bank, the country’s third-biggest lender, has said it has succeeded in attracting 10% private investor participation in its recapitalisation plans, thus avoiding falling under state control

Shares in Alpha Bank have shot up, a day after the bank announced it had secured enough support from the private sector to avoid coming under state control.

In afternoon trading Thursday, Alpha shares were 16.5% higher. Earlier they had risen by more than 18%.

The market euphoria follows confirmation from Alpha that it will raise up to 550mn euros from private investors, including 457mn euros from a rights issue and the remainder from a private placing.

The €457m rights issue by Greece's third-biggest lender will be fully underwritten by a syndicate of international investment banks, including JP Morgan, Citigroup, HSBC and France's Credit Agricole, the lender said in a statement. Greece's four major lenders, including Alpha, are being recapitalised with a total €27.5bn to restore their solvency.

They will get at least 90% of that money from bank bailout fund HFSF, which is financed by the European Union and the International Monetary Fund.

But under the terms of their bailout, they will be nationalised if they fail to attract private investors to cover the remaining 10%.

Alpha becomes the second Greek lender after Piraeus Bank to say it has already met the 10% requirement.

Piraeus, the second-biggest lender, has already said it raised more than €500m from Portuguese peer BCP Millennium and France's Societe Generale, whose Greek units it took over earlier this year.

Alpha said on Wednesday it became the first Greek bank to have investors fully underwriting its new shares.

Investors in Alpha will get 1.944456 new shares for every existing one, said the bank which priced the new stock at €0.44 each. Alpha's existing shares closed at €0.96 in Athens on Tuesday, before a May 1 holiday.

National, Greece's biggest lender, has said it aimed to beat the 10% recapitalisation target.

Eurobank , the smallest top-tier bank, called off the search for private investors, saying it would fall under full state control instead.

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Economy
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Recapitalisation
Banking
Alpha Bank