Divestment strategy with transparency and credibility for the sake of the public interest and financial stability

Athens, January 11, 2023.  The Hellenic Financial Stability Fund (HFSF) announces the completion of the updating process for the Divestment Strategy, which was drawn up pursuant to Law 3864/2010, all interested parties are in agreement and it has been approved by the Ministry of Finance.  The key points of the Divestment Strategy are described in detail here.

The Divestment Strategy adheres to the principles defined in the legal framework governing the operation of the HFSF as well as all relevant legal and regulatory provisions.  The current HFSF legal framework elevates the divestment objective to a par with the Fund’s other objective, namely its contribution to the maintenance of Greek banking system financial stability for the sake of public interest and sets year-end 2025, the Fund’s sunset date, as the timeline of its completion.

The Fund will expend all reasonable efforts to dispose of all its shares in the Greek systemic banks before its sunset date, in an orderly manner, in line with its objective to maintain financial stability while ensuring market that it receives fair value.

The sale of shares in any of the Greek systemic banks is fully consistent with the HFSF’s responsibility to promote financial stability and reflects the progress of the Banking sector in addressing past weaknesses and achieving sustainable profitability.

The Divestment of the Fund’s holdings will also provide important benefits to the Greek economy as a whole by increasing the free float of the Greek Banks that should further boost the Greek capital markets’ liquidity and efficiency, by providing more opportunities for foreign direct investment in the Greek banking sector at scale and by demonstrating pro-actively the progress towards re-establishing a banking sector under fully private ownership.

The HFSF will identify opportunities to initiate and execute well-designed transactions that monetise its portfolio in the most advantageous way always in compliance with the entirety of its legal framework. It will also consider any unsolicited approaches it receives and any proposals that may be put forward by the Banks.

In deciding whether a sale of shares should be pursued, the HFSF will take into account its financial stability obligations as well as the fairness of the value offered for its holdings. In any case, when executing transactions, the HFSF will follow a transparent and competitive process while maintaining confidentiality as appropriate for the specific transaction.

Throughout the divestment process, the Fund will observe a number of Key Principles:

1. Clarity of purpose: adhere to a clear and concise strategy that defines general parameters for individual transactions;

2. Transparency about Divestment Strategy: communicate clearly its strategic objectives and approach to all stakeholders;

3. High standards: adhere to best practices and remain fully compliant with the prevailing legal and regulatory framework;

4. Transparent and competitive transaction process: follow an open process in all its divestments and all bona fide investors will be sure to be treated in a transparent and non-discriminatory manner. The HFSF will not implement any bilateral negotiation or transaction without a competitive process, the timing of which will be announced at the start of the transaction.

Throughout the divestment process, the HFSF will seek to enhance the value of its portfolio, although the design, structure, sequencing, and execution of individual transactions will be subject to prevailing market conditions and the performance of the Banks.

The HFSF will not commit to a particular timing or sequencing of transactions, within the overall divestment framework, that could be detrimental to the overall value of its portfolio. Moreover, it does not consider individual transactions as setting a benchmark for subsequent ones that will be designed and executed in light of the then prevailing circumstances.

The Chairman of the General Council of the HFSF, Andreas Verykios, said:

“Divestment is a particularly important and complex process which will be executed with full respect for the principles of transparency and efficiency in the interest of the Greek economy.  The HFSF will be called upon to make decisions striking a balance between decision-making speed and economic efficiency during times of economic uncertainty.  The fact that all stakeholders have agreed on the Divestment strategy guarantees that the project will be implemented with credibility and an unwavering commitment to the public interest.”

The Chief Executive Officer of the HFSF Ilias Ε. Xirouhakis commented:

“The publication of the Divestment strategy of the HFSF is a milestone amidst the major challenges that the HFSF has learned to navigate.  We are proud that despite the difficulties of the current situation, the Greek systemic banks have spectacularly improved their performance and are ready to make dynamic steps in the coming years for the sake of their shareholders, the public interest, the development of the Greek economy and financial stability.”