The big deal between Eurobank and Fairfax for EuroProperties SA

The American treasury Company Fairfax, will become the largest shareholder of Eurobank Properties (EYPRO), increasing its stake from 19% to 42%, through a share capital increase which will be covered over the three quarters. Eurobank’s shareholding is going to be reduced respectively, but the Bank will retain the management. This deal can be considered as a vote of international investors’ confidence in the prospects of the Greek economy. In addition, the chairman of the U.S. Company declared that even begins to look light in Greek tunnel.

By strengthening its equity and liquidity, Eurobank Properties will become the undisputed leader of the industry and will seek to exploit opportunities created arising by Greek Public’s real estate.

As officially announced, Eurobank and Fairfax (which are now the two largest shareholders of the listed property company, with rates 56% and 19% respectively), signed an agreement that includes the following elememts:

–          Eurobank Properties will conduct SCI at 200 million, with pre-emptive rights of existing shareholders and an issue price of EUR 4.80 and a ratio of 6.8 new to 10 old shares

–          Fairfax will participate exercising its own and Eurobank’s rights, which be bought for € 20 million.

The American company, except for 20 million for the acquisition of rights, will also inject into 144 million during share capital increase.

After the accomplishment of the procedure, Fairfax will own 42% and Eurobank 33,5% of Eurobank Properties. Their shareholding rates may be slightly higher if a large number of small shareholders do not get involved in the share capital increase. It should be noted Note that the third major shareholder is Fidelity’ portfolio, holding 5.9%.

According to Eurobank and Fairfax agreement, Greek bank maintain the management of Eurobank Properties until June 30, 2020, while Fairfax will have representation on the Board and veto rights. This agreement will be valid provided that the participation of Eurobank remains above 20% of share capital.

The head of the American Company expressed that there are positive prospects regarding the Greek economy, justifying his Company’s decision to place additional funds in Greece through Eurobank Properties.