ETBA sale to Piraeus is finalized
Piraeus Bank, the fifth largest bank in Greece, yesterday signed the final agreement for the acquisition of a controlling 57.8-percent stake in ETBA Bank for 510 million euros (173.8 billion drachmas) after the government agreed to assume final responsibility for Hellenic Shipyards in the event of its unsuccessful sell-off and to bear half the costs of an embezzlement scandal at ETBA Finance. Under the terms of the deal, the State will today transfer 100 million of ETBA shares to Piraeus worth 510 million euros (173.8 billion drachmas). Piraeus will pay 367 million euros (125 billion drachmas) in cash and the remaining 14 million euros (48.8 billion drachmas) in two equal half-yearly installments for its majority stake. ETBA’s remaining 42.2 percent equity is spread out between the state with a 7.8-percent stake in ETBA, Agricultural Bank with a 10.5-percent share and investors who hold 23.9 percent. The agreement, held up by the protracted sale of Hellenic Shipyards and the discovery of an embezzlement scandal at ETBA subsidiary ETBA Finance, came through after the State agreed to take responsibility for both cases. Should the shipyard, in which ETBA holds a 51-percent stake, fail to clinch a deal with German shipyard HDW over the next six months, the government will take over the company. Hellenic Shipyards is estimated to have a book value of 4.4 million euros. Doubts have emerged over the shipyard’s disposal after HDW was itself acquired by US equity group One Equity Partners last week. The German shipyard, however, said it continues to be interested in the Greek company, despite the change of ownership. The government will place 20 million euros (5.7 billion drachmas) into an account to cover claims relating to the embezzlement at ETBA Finance. The sum is half of the 30 million euros (11.4 billion drachmas) estimated to have been pilfered from the company. ETBA will cover the remaining half of the losses. Following the takeover, Piraeus said it plans to merge the leasing and asset management operations at both banks. It expects to see value worth 60 million euros from 2004 onwards following the merger. The merged bank will have a 10-percent share of the lending market, 20 percent of leasing, 18.6 percent of the closed-end investment fund sector and a network of 220 branches. Piraeus Bank head Michalis Sallas said ETBA will continue to focus on regional and industrial development after its integration into the bank.
