The Decree implements the decision of the Council of Ministers of 14 December 2015 to recapitalize SKT through the increase of its share capital by € 175 million.
See the decree
According to the Decree, the increase will be fully covered by the Recapitalization Fund, in return for participation in the ownership structure of SKT, to strengthen its capital base.
The Decree stipulates that by March 31, 2016, the Minister of Finance must submit a report assessing the value of the SKT share and its associated Credit Credit Institutions within thirty days of the submission of the valuation report and no later than April 30, 2016. A new Decree will be issued, which will determine the percentage of participation and the rights of each shareholder in SKT, as well as the nominal value of its shares.
With the issuance of the Decree on April 30, 2016, the percentage of participation of SKT in the ownership structure of each SPI will amount to 100% while each Cooperative Participation Company of SPI will acquire a percentage of participation in the ownership structure of SKT based on the valuation.
Until December 31, 2016, SKT will proceed with all the necessary actions and will receive the required approvals so that it is possible for it to be listed on the Cyprus Stock Exchange from June 2017.
The SCB will take all necessary measures to prepare for a possible entry of its shares in the main market of the Cyprus Stock Exchange or in the Alternative Market of the CSE, if the conditions for the entry of its shares in the main market are not met.
Until September 30, 2018, SKT introduces to the CSE through an increase in its share capital, shares, the value of which amounts to 25% of the paid share capital.
In case the shares are sold through a public call, then the existing shareholders, apart from the Republic and the Recapitalization Fund, have the first right to buy the shares depending on the percentage they maintained before the issuance of the new shares, while a percentage that would not exceeds 25% of the total issuance rate will be made available to the public and the remaining percentage in a limited number of persons through private offering.
Subsequently, SKT should proceed with additional issuance of new shares at a rate of 25% of the paid-up share capital by June 30, 2019 and 25% of the paid-up share capital no later than June 30, 2020.
After the introduction of the latest version, the combined balance of the participation of the Republic and the Recapitalization Fund in the ownership structure of the SKT should not exceed 25%.
The Decree stipulates that in the event that SKT presents capital deficits, in relation to the respective supervisory requirements, between December 2016 and September 2018, the process of introducing SKT to the CSE, through the issuance of new shares, may begin earlier.
According to the Decree, SKT will not proceed with the listing of its shares in the CSE in the event that the Republic and the Recapitalization Fund allocate their shares to SKT, before June 30, 2020.
It is also clarified that the shares of the Republic and the Recapitalization Fund are available by private offering to potential investors including international financial institutions, large cooperatives or commercial banks, insurance companies, investment funds or pension fund investors, as well as other large ones. In order to minimize the taxpayer's losses, it is necessary to achieve a price equal to or greater than the appraisal price.
With regard to the Co-operation Administration, the Decree stipulates that the SCC Committee consists of eleven members, two of whom will be executive members, two non-executive members and seven non-executive and independent members.
The SPI committee will consist of three executive members, who come from SKT staff, no later than February 29, 2016.
According to the Decree, the Minister, with the consent of the Central Bank and the Parliamentary Committee on Finance, appoints the non-executive and non-executive-independent members of the SCC Committee. The appointment of the members of the GCC Committee shall be ratified by the General Meeting of the GCC shareholders. Also, the SCC Committee has the power to appoint, dismiss and replace members of the SPI Committee and their appointment is subject to the approval of the Central Bank, according to criteria of competence and suitability set by the Central Bank.
In addition, all SPI staff will be transferred to SKT by September 30, 2016.
The total annual remuneration of the senior management as well as any other member of the staff of the SCB and each SPI shall not exceed 80% of the annual remuneration of the Director General, as specified in the respective Budget of the Republic Law.
Finally, all non-financial assets of the SPI will be transferred, based on the Decree, to the SKT by June 30, 2016.
Source: KYPE