Eurobank press release: Capital Increase to raise up to EUR 3,000m

Eurobank’s Board of Directors at its meeting today (04.04.2014) resolved to call an Extraordinary General Meeting to approve a share capital increase for a maximum amount of €3,000m.

The resolution of today’s Board of Directors follows the two previous announcements made by Eurobank and the Hellenic Financial Stability  Fund (“HFSF”) dated 14 November 2013 and 14 January 2014 respectively, with
reference to the initiation of the process for Eurobank to raise new capital, the results of the capital assessment exercise performed by the Bank of Greece and the amended bank recapitalisation law approved by the Greek Parliament on 30 March 2014.

Athens, 4 April 2014 – The Board of Directors of Eurobank Ergasias S.A. (“Eurobank”) has resolved to call an Extraordinary General Meeting (“EGM”) on 12 April 2014 to:
1. Approve a share capital increase via a non pre-emptive issue of new Eurobank ordinary shares for a maximum amount of € 3,000m (the “Equity Offering”).
2. Delegate to the Board of Directors of Eurobank to set the terms of the Equity Offering, including timing, pricing and size, according to market practice and the prevailing market conditions.

The Equity Offering is expected to be executed by means of a private placement through a book-building to institutional and other eligible investors outside of Greece and a public offering in Greece.

According to the amended bank recapitalisation law, the HFSF will set the minimum price at which Eurobank’s new shares may be offered to investors and back stop the Equity Offering.

A price range will be set by the Board of Directors of Eurobank ahead of the launch of the book-building, with the final subscription price of the new shares to be set on the basis of the international and Greek book-building process.

Subject to the issuance of the relevant authorisations by the competent authorities and market conditions, it is expected that the Equity Offering will be completed by mid-May 2014.

Barclays Bank PLC, acting through its investment bank, Deutsche Bank AG London Branch, and J.P. Morgan Securities plc will act as Joint Global Coordinators for the Equity Offering.

Rationale of the capital increase

The proposed Equity Offering is aimed at strengthening the capital position of Eurobank, taking into account the outcome of the recent capital assessment exercise performed by the Bank of Greece, while providing adequate financial resources to take advantage of the current and expected improvement of the economic environment in Greece.

In particular, the proposed share capital increase is expected to allow Eurobank to:

• Meet the capital needs as set by the Bank of Greece;

• Strengthen the capital position, by increasing the Core Tier 1 ratio to approximately 19.3% on a pro-forma basis as of 31 December 2013; 

• Materially broaden the private shareholder base and free-float;

• Support the recovery of the Greek economy.

Christos Megalou, Eurobank Chief Executive Officer, commented:

"2013 was a transformational year for both Eurobank and the Greek economy. For Eurobank, the inception of the new management and the successful acquisition of the New TT Bank and the New Proton Bank marked a new chapter as one of the four systemic Greek banks.

Today’s announcement represents another key milestone, as we are working closely and with the full support of our main shareholder, the HFSF, towards strengthening Eurobank and broadening its shareholder base.

This capital increase will provide the financial resources needed for Eurobank to meet the capital requirements and also be in the forefront of the opportunities provided by the rapidly improving conditions in the Greek economy.