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Piraeus Bank’s Board of Directors calls for an Extraordinary General Meeting to approve a capital raising in an amount of up to €4.9bn
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Press Release
Piraeus Bank’s Board of Directors calls for an Extraordinary General Meeting to approve a capital raising in an amount of up to €4.9bn
The Board of Directors of Piraeus Bank (the "Bank") has decided to call an Extraordinary General Meeting ("EGM") to approve (i) a capital increase via a non pre-emptive issue of new ordinary shares to the private sector ("Equity Issue"), the ongoing Liability Management Exercise (the “LME”), launched by the Bank on 15 October 2015, and the issuance of new ordinary shares and Contingent Convertible Bonds ("CoCos") to the Hellenic Financial Stability Fund ("HFSF") (together, the "Capital Raising"), and (ii) a reverse stock split.  It is expected that the reverse stock split ratio will be not fewer than 100 existing ordinary shares for every new ordinary share.  The Board of Directors intends to raise through the Capital Raising total capital in an amount of up to €4,933m.  In the Equity Issue, Piraeus is seeking to raise an amount to cover its capital requirements from the AQR (as defined below) and the ST (as defined below) under the baseline scenario, less the capital amount generated by the LME of up to approximately €600m, less the capital amount attributable to other mitigating actions, if any.  Subject to investor demand, Piraeus reserves the right to upsize the Equity Issue.  The minimum price in the Equity Issue is €0.3 per ordinary share, which is the nominal value of the ordinary shares.
The Equity Issue is expected to be executed by means of a book-building to institutional and other selected investors.  The total amount of the capital that will be sought through the book-building and the HFSF will be adjusted accordingly by the Board of Directors, taking into account the outcome of the Liability Management Exercise.
Deutsche Bank AG London Branch and UBS Limited are acting as Joint Process Banks, Joint Global Coordinators and Joint Bookrunners, Credit Suisse Securities (Europe) Limited is acting as Joint Global Coordinator and Joint Bookrunner, and Euroxx Securities and Mediobanca – Banca di Credito Finanziario S.p.A. are acting as Joint Bookrunners for the Equity Issue.
The Comprehensive Assessment and the capital requirement for Piraeus Bank
The European Central Bank published on 31 October 2015 the capital needs for each of the Greek systemic banks resulting from the Comprehensive Assessment ("CA").  The CA included an Asset Quality Review ("AQR") and a Stress Test ("ST") under a baseline and an adverse scenario.  The total capital requirement for Piraeus Bank was assessed at €4,933m, comprising of a capital shortfall of €2,213m resulting from the AQR and the ST under the baseline scenario, and an additional capital shortfall of €2,720m resulting from the ST under the adverse scenario (all amounts exclude mitigating actions expected to be approved by the European Central Bank and to partially offset these shortfalls).
Transaction rationale
In addition to meeting regulatory capital requirements, the Capital Raising will assist Piraeus Bank in:
• Strengthening the capital position of the Bank, bringing it at the top-end among European peers in terms of CET1 capital ratio;
• Increasing private shareholder ownership;
• Enhancing the Bank's perception among domestic depositors and facilitating the accelerated restoration of the Bank's funding base and the subsequent replacement of Emergency Liquidity Assistance (ELA) funding with deposits; and
• Supporting the recovery of the Greek economy by capitalising on the Bank's leading market positioning, leveraging on growth opportunities and fostering healthy credit origination.

EGM invitation
The Capital Raising is subject to the EGM approval which will be convened for 15 November 2015.  The Equity Issue is expected to be executed by means of a book-building to institutional and other selected investors.
Athens, 4 November 2015
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This announcement is not an offer for sale of securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended. The Bank does not intend to register any portion of the offering in the United States or to conduct a public offering of securities in the United States.
This announcement and the offer when made are only addressed to and directed, in Member States of the European Economic Area which have implemented the Prospectus Directive (each a “relevant member state”), in circumstances in which the publication and/or approval of a prospectus would not be required under the Prospectus Directive (Directive 2003/71/EC) and pursuant to the relevant implementing rules and regulations adopted by each relevant member state. Each person in the European Economic Area who initially acquires securities or to whom any offer of securities may be made will be deemed to have represented, acknowledged and agreed that the aforementioned limitation has been complied with.
This announcement is not for publication, distribution or release, directly or indirectly, in or into the United States, Canada, South Africa, Australia or Japan or to any other jurisdiction where such announcement or publication would be unlawful. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
In the United Kingdom, this announcement is being communicated to and is directed only at “qualified investors” within the meaning of Article 2(1)(e) of the Prospectus Directive (2003/71/EC, as amended by Directive 2010/73/EU) (“qualified investors”) who are also: (i) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, (the “Order”); (ii) persons falling within Article 49(2)(a) to (d) of the Order; or (iii) persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). This announcement must not be acted on or relied upon by persons in the United Kingdom other than relevant persons.
The information contained in this announcement is for informational purposes only and does not purport to be full or complete. No reliance may or should be placed by any person for any purposes whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is subject to change.
Credit Suisse Securities (Europe) Limited, Deutsche Bank AG, London Branch, Mediobanca – Banca di Credito Finanziario S.p.A. and UBS Limited, each of which are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, are acting exclusively for Piraeus Bank and no-one else in connection with the proposed transaction. They, and Euroxx Securities, will not regard any other person as their respective clients in relation to the proposed transaction and will not be responsible to anyone other than Piraeus Bank for providing the protections afforded to their respective clients, nor for providing advice in relation to the proposed transaction, the contents of this announcement or any transaction, arrangement or other matter referred to herein.
The contents of this announcement have been prepared by and are the sole responsibility of the Bank. None of Credit Suisse Securities (Europe) Limited, Euroxx Securities, Deutsche Bank AG, London Branch, Mediobanca – Banca di Credito Finanziario S.p.A and UBS Limited or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Bank, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.
Forward Looking Statements – Important Notice
This document includes forward-looking statements which include statements regarding Piraeus Group’s business strategy, financial condition, profitability, results of operations and market data, as well as other statements that are not historical facts. Words such as “believe,” “anticipate,” “plan,” “expect,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “should,” “aim,” “continue,” “could,” “guidance,” “may,” “potential,” “will,” as well as similar expressions and the negative of such expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying these statements. By their nature, forward-looking statements are subject to numerous factors, risks and uncertainties that could cause actual outcomes and results to be materially different from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements. Except for any ongoing obligation to disclose material information as required by the applicable law, Piraeus Bank does not have any intention or obligation to publicly update or revise any forward-looking statements after it distributes this document, whether to reflect any future events or circumstances or otherwise.