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Legacy Laiki is largest shareholder in new Bank of Cyprus

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(Globalpost/GlobalPost)

NICOSIA (Reuters) - Legacy Laiki Bank is the largest stakeholder in Bank of Cyprus <BOC.CY>, owning 18 percent of shares following a bail-in of depositors to prop up the lender, Bank of Cyprus said on Wednesday.

The Cyprus crisis which erupted in March was the first time in the history of the euro zone that bank depositors were forced to take losses to prop up insolvent banks.

Bank of Cyprus, the island's largest bank, imposed a 47.5 percent impairment on deposits exceeding 100,000 euros which it converted into equity to fund the recapitalization of the bank.

Bailed-in depositors now hold around 81 percent of the bank's capital, Bank of Cyprus said in a statement.

Legacy Laiki is what remains of Laiki Bank, which was the country's second-biggest lender and is now effectively defunct, having been wound down under the terms of Cyprus's bailout accord with international lenders.

Its assets, some of which were sold off and others transferred and merged with Bank of Cyprus, now represent 18 percent in Bank of Cyprus's new shareholding.

Legacy Laiki, which is being run by an administrator appointed by the regulatory authority, is the single largest shareholder in Bank of Cyprus and the only shareholder with a stake exceeding 5 percent.

Convertible bond and ordinary share holders dating from before March 29, when Bank of Cyprus went into resolution, now account for less than 1 percent of the bank's share capital.

The lender is under an interim management and board of directors until an annual meeting of shareholders scheduled for the first half of September.

(Writing By Michele Kambas; Editing by Pravin Char)

http://www.globalpost.com/dispatch/news/thomson-reuters/130731/legacy-laiki-largest-shareholder-new-bank-cyprus