Eurobank, Grivalia Properties to Merge, Securitize NPEs


Eurobank, Grivalia Properties to Merge, Securitize NPEs

Greece’s Eurobank Ergasiasannounced plans to merge with real estate fund Grivalia Properties in a deal that will see the lender also securitize about 7 billion euros ($7.9 billion) of troubled loans.

The deal will see the bank’s ratio of non-performing exposures drop to about 15 percent by the end of 2019, from 39 percent currently, then into single digits by 2021, the two companies said in a joint statement. The deal will also increase the restructured lender’s common equity tier one ratio to 16.6 percent from 14.6 percent currently.

Shares in the merged company will start trading on April 24, according to the statement. The deal boosts Eurobank’s capital by more than 800 million euros, according to a person familiar with the deal, who asked not to be identified.

The exchange ratio proposed is about 15.81 new Eurobank ordinary shares for every one Grivaliaordinary share, according to the statement. Eurobank shareholders will retain the number of Eurobank ordinary shares they currently hold, the companies said.

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