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Sidley Austin and Linklaters lead on Bank of Cyprus €1bn capital raise

The London teams of both US firm Sidley Austin and Magic Circle firm Linklaters have scored heavyweight roles advising on a €1bn capital raise for the beleaguered Bank of Cyprus, in a landmark deal completed just one year after it was saved from collapse by an international rescue package.

Sidley acted as international legal counsel to the Bank as it raised the mammoth sum through a private placement, which includes international fund managers led by US billionaire Wilbur Ross and the European Bank for Reconstruction and Development.

Led by City-based global finance partner Matthew Cahill, who was supported by capital markets partner Stephen Roith, US securities partner Bart Capeci, and capital markets counsel Shireen Khoo, the team has advised Bank of Cyprus since it was placed into resolution in March 2013.

At Linklaters, corporate partner Nick Garland and capital markets partner Jason Manketo were also instructed as placement counsel, advising HSBC and Credit Suisse while Cypriot firm Chryssafinis & Polyviou acted as local counsel.

On the progression made by the bank just 12 months into its rescue deal, Sidley’s Roith said: ‘That Bank of Cyprus has successfully raised €1bn of new share capital just 12 months after exiting resolution is a great achievement and we understand that it is likely to be beneficial to the Cypriot economy as a whole. This was an interesting deal, as it had some of the characteristics of an institutional share offering and some of a private equity sale. We look forward to supporting Bank of Cyprus through the next stages of its capital raising.’

The deal is subject to approval by shareholders at an extraordinary general meeting in late August, with new shares expected to be sold at €0.24 each.

It constitutes an important step for the bank to regain market access since it came out of resolution in July last year. The private placement involved an ‘unusual and complex arrangement’ whereby a publicly-listed company offered unlisted shares privately to a group of potential investors.


For more on the Cypriot legal market post-crisis, see Making bail – getting Cyprus back on its feet