HFSF pathway out of banks

The life span of the Hellenic Financial Stability Fund (HFSF) has been extended until 2025, so that the bank bailout fund will have until then the opportunity to complete its divestment from the banks and have their full privatization achieved. This is another step in the complete privatization of the Greek credit sector.

According to the new bill on the HFSF that has been put up for public consultation, the divestments will have to be completed based on specific rules and procedures that should bear the approval of the finance minister.

The concession of the fund’s shares in the lenders may be done in stages or at once, as the fund deems appropriate, after its management has drafted its divestment strategy blueprint in accordance with the recommendation of an independent financial consultant and the consent of the ministry.

The minister will have the final say on the privatization of banks, approving both the consultant for the concession of shares (from three short-listed candidates) and the valuation report for every credit institution that must also be drafted by an independent consultant before the stake sale.

Based on the existing legislation, the concession can take place through the sale of shares to the public, to an investor or a group of investors, via an open tender or an invitation of expressions of interest to selected investors, through bourse orders, a public offering of shares, the opening of a bidding book or a share capital increase.

The sale price for shares the HFSF owns and the minimum price private investors will have to pay are determined by the fund’s board, based on the valuation of the independent consultant.

The draft bill also abolishes the right of the HFSF representatives on the governing boards of banks to ask for the calling of a shareholders’ general meeting, their right to approve the banks’ chief economic officer and the right to assess the corporate governance of lenders, as long as the HFSF remains a stakeholder in the country’s banks.