ATHENS, June 19 Canadian investment firm Fairfax
Financial Holdings will raise its stake in Greek real
estate firm Eurobank Properties to 42 percent from 19,
parent Eurobank said on Wednesday.
Fairfax and Eurobank aim to strengthen their relationship as
shareholders of Eurobank Properties and boost its resources to
make it a leading player in the country's real estate market.
Under the deal, Eurobank Properties will proceed with a
rights offering of about 200 million euros at 4.80 euros a
share, with Fairfax exercising its own rights and purchasing
Eurobank's rights for 20 million euros ($26.78 million).
After the capital increase Eurobank will hold about 33.5
percent in the real estate firm provided all other shareholders
exercise their rights.
"The Greek people have worked through tremendous hardship
but we think the light is now visible at the end of the tunnel,"
Prem Watsa, Chairman and CEO of Fairfax, said in a statement,
referring to the country's economic crisis.
Eurobank Properties has a current market capitalisation of
406 million euros. Fairfax will pump in about 164 million
through the rights offering.
As part of the deal, the two sides will agree that Eurobank
will retain management control at Eurobank Properties until June
2020, with Fairfax represented at the firm's board with
customary veto rights.
Eurobank, Greece's fourth largest lender, opted to be fully
recapitalised by a state bank rescue fund to plug a 5.84 billion
euro capital hole after losses on sovereign debt writedowns and
bad loans. It has fallen under the full control of the Hellenic
Financial Stability Fund.
Earlier this year, Fairfax had expressed interest in taking
part in National Bank's recapitalisation but a deal
did not materialise as the fund's conditions could not be met.