Alpha Bank will wait for PSI finalization to wrap up the deal

In order to finalize its stance in relation to the merger agreement with Eurobank, Alpha Bank will proceed with convening a general meeting of shareholders following the finalization of the PSI terms. 

Earlier, for about 5 hours, the two sides reviewed the entire agreement from the start, and especially the issue of loss of Greek bonds because of the PSI+. 

It should be noted that according to bankers, the losses and recapitalization needs will be different if the program brings losses of 50%, than if it were to come at 70% of net present value (NPV), while the Eurobank report on Greek bonds is almost two times greater than that of Alpha Bank. It is also said that they reviewed the issue of the share exchange ratio. 

Here is the Alpha Bank statement: 

1) With today's announcement, the Bank informed its investors that currently it cannot provide an accurate indication of the timing and overall development of the merger with EFG Eurobank Ergasias, as a result of the current macroeconomic developments (Private Sector Involvement - PSI) with a direct impact on the banking sector. 

2) It is stressed that the November 15, 2011 decision of  the General Assembly of the Bank had not taken into account, nor did it consider, the impact of the then published - since October 26, 2011 - plan on providing financial assistance to Greece (PSI +) since by express declaration of the Boards of Directors of the merging banks, each institution's inability to identify the impact of the PSI+ was mutually established as a result of the (then) uncertainty concerning the conditions of its application. Accordingly, the decision of the General Assembly of the Bank was based on the announced (since 07/21/2011) PSI plan, to the exclusion of any subsequent developments.

 

3) In view of the above, the Bank intends to await the finalization of the PSI terms, the effects of which are estimated to be disproportionate to the sizes of the merging banks. 

Protothema.gr first reported the news on complications in the merger deal of the two banks, with Finance minister Evangelos Venizelos taking a formal position in favor of its completion. 

Earlier, the administration of the Athens Stock Exchange had moved to suspending the trading of both shares, with Alpha Bank earning around 6%, and Eurobank falling by 2.4%. 

Following Alpha Bank, Eurobank’s statement reads: 

All necessary permits have been obtained and the only process that remains is the formal part of signing the deed and the relevant formalities and approvals. 

The main terms and the PSI+ framework, as decided at the summit of 26-27/10, were already known during the decisions of the General Assemblies of both banks that approved the merger by more than 97%.