ATEbank shareholders approve cash call
Fri Apr 29, 2011 11:33am EDT
* ATEbank to issue new shares 13-for-1 at 1.07 euro each
ATHENS, April 29 (Reuters) - Greece's ATEbank (
AGBr.AT), the only Greek lender to fail EU-wide bank stress tests last year,
got shareholder approval on Friday for a 1.26 billion-euro ($1.9 billion) rights issue to boost its capital.
The move is a further step by the state-controlled bank to deal with the country's debt crisis, which devalued its government bond portfolio and increased its bad loans.
ATEbank, which is on the government's divestments agenda, plans to sell 1.177 billion new shares, offering shareholders 13 new shares for every one held at 1.07 euros each.
The government, its major shareholder with a 77 percent stake, has said it would fully exercise its rights by contributing 974 million euros.
ATEbank's plan entails a 1-for-10 share consolidation, with an increase in the nomnal value of its common shares to 7.2 euros from 0.72 euros.
Its share capital will then be cut by 597.6 million euros, with the nominal value cut from 7.20 to 0.60 euros, in order to create a special reserve of an equal amount.
The subscription price reflects a discount of 31.7 percent from the theoretical ex-rights price based on the weighted average closing price of the last six months.
ATEbank was the only Greek lender to fail the pan-European stress test last year. The simulation revealed a Tier I capital ratio to assets of 4.36 percent -- above the regulatory minimum of 4 percent but below the stress test threshold of 6 percent.
The rights offer, to be completed by July, will raise its total capital adequacy ratio to 12.54 percent, the lender said in March.
The government said earlier this month that it expects its stake in the bank to be reduced after the capital increase.