Voo Stock – Alpha Bank poised to gain shareholder backing for equity offer – sources
ATHENS (Reuters) – Alpha Bank, one of Greece’s four largest lenders, is on track to secure shareholder approval for a planned 800 million euro ($969 million) share offering at a vote on Tuesday, banking sources told Reuters.
One Alpha Bank source said on Monday that shareholders were “overwhelmingly in support” of the proposal, which will need the backing of at least two-thirds of those at the extraordinary general meeting and a 50% quorum for the offering to proceed.
Supporters included the bank’s major shareholder, the Hellenic Financial Stability Fund (HFSF) which holds nearly 11%, a source at the fund, who also declined to be named, said.
Alpha Bank wants the fundraising to fuel growth as European Union recovery funds start flowing in.
The planned share sale will be via bookbuilding to international institutional investors and a simultaneous public offering in Greece, targeting completion by mid-July.
Alpha Bank has said that although preemptive rights will be cancelled, priority will be given to existing shareholders.
Its top institutional shareholders include U.S. based Vanguard Group, Capital Research, BlackRock and Norway’s Norges Bank, while UK-based asset manager Schroders said recently it held 5.08% of Alpha Bank’s total voting shares.
Glass Lewis backed the “strong rationale” for the proposal in a proxy paper, saying it would take advantage of favourable market conditions, with the benefits outweighing any dilution concerns.
But not all of Alpha shareholders are on board and ISS, another proxy adviser, has opposed the plan, saying the bank faces no capital adequacy issues and shareholders who cannot participate will suffer dilution.
U.S. based hedge fund manager Paulson & Co. which holds nearly 7% of the bank’s shares is also not in favour, another banker close to the transaction said.
Alpha, with a current market value of 1.85 billion euros, has said the capital increase will help it drive its bad loan ratio to around 2.0%, and generate 10% return on equity by 2024.
($1 = 0.8254 euros)
Reporting by George Georgiopoulos; Editing by Alexander Smith