On Monday, Greece’s Alpha Bank froze merger talks with Eurobank pending the conclusion of tough negotiations between the government and private creditors on a huge sovereign debt write-down.
“The bank intends to await the finalisation of the terms of the (debt write-down) and shall then convene the bank’s general meeting of shareholders, so that the latter can be duly informed and resolve upon (the course to follow) accordingly,” Alpha Bank said in a statement.
The bank added that the attempted bond swap, designed to erase around 100 billion euros ($132 billion) from Greek debt held by private creditors globally, was expected to affect it and Eurobank in a “disproportionate” manner.
Last year, Alpha Bank posted a nine-month net loss of 566.7 million euros after writing off 608.1 million euros in Greek sovereign debt.
Alpha Bank noted that the intended merger approved by Alpha Bank and Eurobank shareholder meetings in November had been premised on a milder debt write-down agreed by the eurozone in July that called on banks to accept a 21-percent loss.
A follow-up agreement in October increased the debt write-down to 50 percent in order to make Greek repayments more sustainable.
The merger plan, originally slated for completion in December, was designed to create Greece’s largest lender with major backing from a Qatari investment fund.
The Athens stock exchange earlier on Monday ordered a temporary suspension of trade in Alpha Bank and Eurobank shares based on uncertainty that the planned merger between the two prominent lenders can be completed.
Alpha Bank earlier on Monday said it could not inform investors when the deal would be sealed, with negotiations between Greece and the International Institute of Finance, a global bank lobby group, ongoing from November.
For its part, Eurobank said it was working to complete the merger as soon as possible.
(Source: Business Recorder)
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