Unprecedented BoE tolerance in the bankrupt Attica bank, the black hole of 600 million – Governments are molesting a corpse

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The scandal is timeless, continuous and catastrophic for the employees as in the shock treatment phase that is coming they will suffer the consequences of this failed path to the cliff.

A bank with 186 million – according to its statement – capital and 3.6 billion assets has a market value of 29.6 million; the stock market obviously values ​​Attica bank as a bankrupt bank.
We have analyzed that Attica bank has a black hole of 600 million euros and this explains why no investor has been interested for years, this explains why all the recapitalizations fail and this explains why the bank failed.
Failure has a name.

Pantalakis failed in management

Responsibility for the failure of Attica bank lies not only with Pantalakis, the CEO who in our opinion was unsuitable to bear the burden of this small but permanently defective bank…
Pantalakis’s past – see Bank of Agricultural Bankruptcy and split into good and bad Proves that it no longer has the capacity or sufficiency to ensure the survival of a bank.
He has been managing Attica bank for years and the result of Pantalaki’s management was
1) Attica bank has made securitizations of huge costs for the bank.
2) To continue to show unprecedented losses.
3) To have no funds, the 187 million do not exist, the real black hole of Attica bank is 600 million euros.
4) Attica bank shows a bankrupt business model once and its pre-forecast profits are losses.

The Bank of Greece is unprecedentedly covering up a timeless scandal

Once upon a time, Giannis Stournaras, the governor of the BoG, had supported Theodoros Pantalakis as CEO of Attica bank – as he had proposed and placed him in Attica bank – emphasizing that he is one of the best executives in the banking market.
Stournaras has been exposed because his election proved to be a complete failure, Attica bank is not just a bankrupt bank, it is a timeless scandal…

Governments are harassing Attica bank

Obviously, a scandal to be maintained for years by both the governments of ND and by PASOK and SYRIZA means that the involvement of governments in maintaining a toxic bank is timeless.
With losses in the last 18 years about 1.4 billion.
With TSMEDE the Fund of Engineers has lost 1 billion euros unprecedented loss for a fund and without accountability and control that an insurance company wastes 1 billion without liability.
Attica bank has been used by governments as a mechanism for conducting mortgage lending.
There are many cases where Attica bank has lent to businessmen – fraudsters…
The scandal is timeless, continuous and catastrophic for the employees as in the shock treatment phase that is coming they will suffer the consequences of this failed path to the cliff.

One-way is nationalization

The 16,541,878 warrants – documentary securities – issued by Attica bank will be converted into equal shares on October 19, 2021 and on October 20 the trading of the new shares will begin.
The Financial Stability Fund will control 68.2% of the shares, TSMEDE 14.7% and EFKA 10.3%.
The nationalization of Attica bank has been finalized on the one hand because the suitors are not showing interest on the other hand because it is the least expensive capital solution.
If Attica bank is not nationalized and breaks into a good and bad bank, it will cost the Greek government more than 1.5 billion, so with 180 to 190 million that the Financial Stability Fund will spend, there is a huge difference, nationalization costs less than the activation of the resolution, bail in and split in good and bad bank with cost for the public 1.5 billion, which would be the funds that would be placed by TEKE the Deposit Guarantee Fund to cover the financing gap – funding gap.
Attica bank therefore avoids bail in with the involvement of bondholders and depositors because it is a more expensive and costly solution than nationalization.
DGComp, the European Competition Commission, approved the allocation of state funds from the Financial Stability Fund, stating that it does not cover 100% of the funds, ie the 240 million that Attica bank has announced will be the amount of the capital increase.
If it covers 100% it will be considered state aid, ie state aid and could not approve the recapitalization with state funds.
For this reason, TSMEDE, the Fund of Engineers, will participate with 50 million euros because it is a Legal Entity under Private Law.
The Financial Stability Fund with up to 190 million and the TSMEDE with 50 million total 240 million euros.
In this phase, in the phase of nationalization, a private investor will not participate but in a next phase where new additional funds will be needed.

The warrants had an initial price of 9.18 euros or 151.8 million and the current value is 100 thousand euros

Only from the market value of 16,541,878 warrants – documentary securities – issued against the 151.8 million which was the capital that came from the activation of the law on DTC the deferred tax requirement πολλά many conclusions are drawn.
The warrants started with a price of 9.18 euros or 151.8 million euros and on October 19 turn into 16.541 million common shares.
No action was taken during the trading of the warrants on the stock exchange, however, the prices that were placed without execution gave valuations to the warrants of 100 thousand euros.
That is, 151.8 million have a value of… or are valued at 100,000 euros or 99.8% fall, ie zero and disaster.

Some bitter truths about Attica bank

Does Attica bank have positive capital of 187 million as it states or -600 million negative equity?
The answer is this, the only sure thing is that Attica bank does not have 187 million positive capital.

The recapitalization of Attica bank in two phases

Attica bank will be recapitalized in two phases.

The first phase is already underway.
On October 14, 2021, the trading deadline of 16,541,878 warrants expired, which will be converted into shares and will become the property of the Financial Stability Fund.
The HFSF will be found with a percentage of 68.2% and TSMEDE with a percentage of 14.7% and EFKA with a percentage of 10.3%.
In the first phase, the increase will be 240 million euros and the Greek state through the HFSF will contribute from 180 to 190 million and TSMEDE 50 million euros.
Despite the fact that TSMEDE has completely failed in its investment in Attica bank, having lost 1 billion euros, the Technical Chamber, which is the physical head of TSMEDE, gives the green light to participate in the increase, mainly because it was set as a condition by DGComp of the EU.
The main reason, however, is that TSMEDE, which is affiliated with EFKA, was offered to participate so that Attica bank would not be fully nationalized instead of 68.2% if the Financial Stability Fund covered 240 million and would hold 90% of Attica bank.
However, the 240 million euros are not enough once and for all, the black hole as we have analyzed is around 600 million euros.

The second phase is coming with a new capital increase and a strategic investor

Before the start of the second phase – after a few months, perhaps in the second quarter of 2022, there will be some serious developments.
The Financial Stability Fund is already in talks with some stakeholders…
The Pantalaki administration will be replaced, as will the entire board.
Attica bank needs a radically modified reorganization plan, a shock treatment as the bank has not only gone bankrupt in terms of capital but also in terms of a growth model.
With a new management, Attica bank will proceed to the second phase of recapitalization, where a private strategic investor, a foreign fund will come through a capital increase to pay new funds.
Attention, the HFSF will not sell through placement but will undergo dilution, ie dilution through the capital increase, however, it will remain a minority shareholder in the future.
The new increase should be between 200m and 300m euros.
The HFSF from 68.2% will fall to 20% and the new investor will own at least 51% to 60% of Attica bank.

With phase 1 of 240 million and phase 2 of 200 to 300 million Attica bank will raise from 440 to 540 million euros and together with its 187 million will zero the NPEs, the two securitizations that will join Hercules will proceed 2 and will receive a rating from the rating agencies and will have positive funds that are fully consolidated.
Then Attica bank needs a new growth model, a new business plan that will aim at complete modernization and small and medium enterprises.
As it is today, Attica bank has no meaning of existence.
Unfortunately this is the bitter truth.

Source: https://www.bankingnews.gr/

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