In a flexible combined process, Alpha Bank is aiming at completing a capital increase within June in a procedure that will allow existing shareholders to participate in the capital hike, depending on the number of shares they own, sources tell Business Daily.
The increase, amounting to 800 million euros, will not take place in the classic way, by giving the right to existing shareholders, as this is a time-consuming process that would lead to the implementation of the increase being completed in July.
However, the management's goal, as emphasized in the announcement, is "is to protect the investment of existing shareholders" and in this context, sources say, all existing shareholders will be able to participate in the capital boost, depending on the shares they own.
It is noted that in Piraeus Bank’s recent share capital increase, a relevant priority was given only to domestic investors.
This way all Alpha Bank shareholders will preserve the value of their investment while only unallocated shares will be covered by new investors. The participation, or not, of the Hellenic Financial Stability Fund (HFSF), which currently holds 10.94 percent of the bank's shares, in the share capital hike remains in question.
Alpha Bank will hold an Extraordinary General Meeting probably in the second week of June and immediately afterwards the capital increase of up to 800 million euros will be implemented. It is noted that if the classic procedure were followed, the trading of pre-emptive rights would start in the 3rd week of July.
At the same time, the general meeting will set the date on which the existing shareholders will acquire priority for participating in the capital increase. Those shareholders who are registered on the day of the general meeting will probably have the right to participate in the rights issue. The bank's goal is to conclude the share sale by the end of June.
Bank sources say the capital increase is not aimed at speeding up the plan to reduce non-performing loans as Alpha Bank's current capital base is sufficient to do this.
The capital increase has a purely growth dimension and aims at the next day: the dynamic financing of the economy under the new conditions created by the Recovery Fund. Alpha Bank's strategic goal, which currently ranks first in terms of financing large companies, is to be able to proceed from day one to the dynamic financing of its clients' investment plans.
The bank has developed a detailed plan for the impact of credit expansion and aims to have a dynamic presence in lending from day one. The goal of the lender is not only to maintain but also to strengthen its traditionally strong connections with the business community.
According to the plan of the Recovery Fund, it will allocate about 12 billion euros to investments, while banks will have to proceed with a corresponding amount of financing.
Alpha Bank's capital plan has the support of both the government and the Bank of Greece.
The bank’s market value exceeds 2 billion euros while the capital increase will not exceed 800 million euros. The bank's share is currently -30%, with unfulfilled sales orders of about 2 million units. Analysts attribute the large drop to the uncertainty caused by the rights issue, the short-term effects on the stock price and confusion about the terms and the target of the capital boost.