NICOSIA (AFP) ― The Cyprus government on Monday acquired 1.79 billion euros worth of Cyprus Popular Bank shares to recapitalize one of the island’s two largest banks exposed to Greek debt, the finance ministry said.
“Taking notice of the amount of shares subscribed by private investors and in line with the decision of the council of ministers ... for the underwriting of the rights issue of capital ... the government acquired 1.79 billion euros ($2.25 billion worth of) shares in the bank,” the ministry said in a statement.
The Cyprus Popular Bank and Bank of Cyprus, the country’s two largest, have been afflicted by the disproportionately large banking sector’s heavy exposure to debt-paralyzed Greece, and a huge write-down of Greek bonds pushed it to seek help.
At the very minimum, the government needs to find a combined 2.3 billion euros to recapitalize the two banks against a worsening of the euro crisis.
