By Lefteris Yallouros – Athens
Piraeus Bank and Marfin Investment Group signed a strategic cooperation deal worth EUR 250 million that will see the Greek lender take a 17.7 pct share in MIG and become its largest stakeholder.
Marfin has holdings is large companies in the food sector as well as health, coastal shipping, information technology and more. The Group has been troubled during the crisis as many of the companied it holds carry considerable financial burdens.
“With the implementation of the strategic agreement and the convertible bonds, the financial structure of MIG is considerably improved,” a Piraeus Bank announcement reads.
Piraeus will acquire the unsold stock of MIG’s convertible bonds that mature on July 29, 2019, which can be converted into shares at a price of 0.54 euros apiece. Piraeus has committed to converting bonds to shares for the amount of at least 90 million euros, which corresponds to a minimum stake of 17.7 percent of the Marfin share capital.
“Our agreement with Piraeus signals a new growth course for our group, to the benefit of its shareholders and employees, and the Greek economy in general,” MIG chairman Andreas Vgenopoulos stated. “Piraeus’s decision to support our plans, which is an honor for us, now paves new and greater ways for the group,” he added.
Sources say the strategic partnership will lead to changes in the structure of many companies. Ferry operator ANEK Lines (that has loans with Piraeus Bank) is expected to be bought by Attica, owned by MIG. Hospital “Errikos Dynan” will be acquired by YGEIA, another MIG company. Furthermore, MIG’s food company VIVARTIA will acquire milk producer MEVGAL.
With Piraeus Bank recently having taken over Greece’s Agricultural Bank (Agrotiki) along with debt carried by many well-known companies, analysts expect synergies to form in the food sector.
The deal comes after a recent plea by the governor of Greece’s Central Bank for company mergers and the formation of healthy businesses that would help the economy along the recovery route and banks deal with mounting bad debt.