Meeting at Maximou on Piraeus Bank

At the meeting held under the chairmanship of Prime Minister late last night, it was decided that the immediate conversion of the CoCos in shares and then the increase in share capital.

In videoconference, also participated the Governor of the BoE, Yannis Stournaras, the Chief Economic Advisor to the Prime Minister, Alex Patelis, and Christos Megalou, CEO of Piraeus Bank.

Although the milestone date is 13 November and the decision of the SSM on the bank's request to pay the €165 million Cocos voucher in cash, reports say the government has already decided to automatically convert the €2 billion of CoCos held by the HFSF in Piraeus Bank shares.

The scheduled payment date is on 2 December and in case the SSM decides that the payment of CoCos falls under the payment prohibition regime - which is according to all information the most likely eventuality - the HFSF will exercise its right automatically, without calling a general meeting of Piraeus Bank.

For this decision the Supervisor may rely either on the fact that the payment of the voucher constitutes dividend distribution in the midst COVID 19, which is prohibited, or that the bank's funds should not be eaten up. After all, since the outbreak of the pandemic, to date, the supervisor has prevented a number of European banks from payment of dividends and coupons.

The convening of a general meeting is not a prerequisite, since the conversion of Cocos is provided for in the contract and will take place automatically within one month of the expiry of the payment date, i.e. on 2 December.

In this case, the state's share in the Bank's share capital will rise to 61.3% from the 26.4% it directly controls today. In this case, however, the objective of the Government and the HFSF will be to make the nationalisation a short and transitional stage as it will be followed by a share capital increase in order to enhance the participation of private shareholders.

The government, as confirmed in the teleconference under the Prime Minister, will not interfere in the operation of the Bank and the management, whose term of office was renewed last summer, will remain.