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Alpha Bank succeeds in recapitalization plan

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Alpha Bank announced that it has found enough investors to back its recapitalization plan. According to an official statement  the bank’s rights offering for the private sector amounting to 457 mil. euros has been fully underwritten by a syndicate of international investment banks, including JP Morgan, City group, HSBC and Credit Agricole.


The capital increase will be up to 550 mil. euros as part of the 4,571 bil. euros capital strengthening plan and will have the following terms: a) 457.1 mil. euros rights offering for new shares through the exercise of pre-emption rights, b) existing shareholders who fully exercise their rights will have the right to oversubscribe an additional 2 times the shares they acquired through exercising the rights, c) allocation ratio stands at 1.94 new shares for one old share at 0.44 euros/share (no reverse split), d) 92.9 mil. euros value of new shares will be allocated through a private placement at 0.44 euro/share, e) the remaining part of the capital strengthening part (4 bil. euros) will be covered by the HFSF, f) the bank will issue 10.3 bil. euros new common shares of par value 0.3 euros resulting to a total number of 10.9 bil. euros shares after the capital increase with a value of 4.2 bil. euros (preference shares at 200 mil. at par of 4.7 euros) and g) all investors participating shall be entailed to receive for 1 share 1 warrant issued by the HFSF. 

Warrants may be exercised semi- annually for a period of 4.5 years from the issue date. Following the completion of the capital increase Alpha bank will have a 13.7% Core Tier 1 ratio (as of December 31st 2012). 

The Rights Offering is expected to close in late May / early June following a 15 day exercise period, subject to relevant regulatory approvals.

Alpha Bank is the second Greek lender after Piraeus Bank that says it has already met the 10% requirement.

Commenting on the announcement, Mr. Yannis Costopoulos, Chairman of the Board of Directors stated: “Our announced Capital Strengthening Plan, along with the acquisition of Emporiki, represent two key milestones in the history of Alpha Bank. Our capital increase has received strong support from our existing shareholders and a number of high quality investors from Greece and abroad. Alpha Bank with its strong capital base, leading market position and dedicated personnel will continue to support its customers and contribute to reviving economic growth.”

Mr. Demetrios Mantzounis, Managing Director – CEO underlined: “Alpha Bank today is the first Greek bank to have firm commitments for its minimum 10% private sector contribution required for its recapitalisation with a fully underwritten Rights Offering of Euro 457 million. Alpha Bank has a number of strengths, most notably its long history of quality banking, and remains committed to creating value for its Shareholders who will benefit from its leading capital position, strong provisioning levels and synergies resulting from the acquisition of Emporiki Bank.”

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