The Special Management period is practically over for the former Laiki Bank, but the issuance of a liquidation decree and the appointment of a liquidator are pending in the courtrooms.
The Central Bank, as a Consolidation Authority, has submitted to the Nicosia District Court a request for the appointment of a liquidator, who will distribute to the creditors, in this case to the depositors, the assets of the two former banking institutions.
In particular, the request for the appointment of a liquidator in the former Laiki Bank was submitted on January 8, 2021, but the court has not yet ruled on the request as objections have been submitted by depositors. The objections were heard on Monday and the court set a new court date on October 22 to consider additional justifications for the objections. The objections are aimed at the applicants' creditors taking over the liquidation.
No one can predict when the examination of the objections will be completed in order to appoint the liquidator. The Central Bank has proposed a liquidator, with the final judgment belonging to the court, which may appoint a person or company different from the proposal before it. The Central Bank, following a tender, has proposed in its application the appointment of Augustinos Papathomas, a registered insolvency consultant, as liquidator.
The liquidator will be tasked with maximizing the value of the assets and distributing them to creditors. According to data presented at a meeting of the Finance Committee last January, the available assets of the former Laiki at the end of September 2020 amounted to 232 million euros. The only asset for which the liquidator must make a decision on its handling is the share package (4.8%) of Bank of Cyprus.
SYKALA has requested that the remaining shares in Bank of Cyprus be distributed to creditors, ie to depositors, instead of being sold. The decision belongs to the liquidator. Note that the Central Bank can not provide instructions to the liquidator on how to proceed.
The former Laiki Bank still has some income from other assets, such as from the management of non-performing loans in Greece.
The “cut” depositors
Cash and shares are the assets that the “cut” depositors of the former Laiki are looking forward to, with the result that the loss they have suffered is significantly lower.
The valuation report of the former Laiki assets, submitted in August 2013 by KPMG UK, set their fair value at € 769 million and liabilities (mainly to depositors) at € 4.9 billion.
In particular, the liabilities concern customer deposits amounting to 3.8 billion euros (for amounts exceeding the insured amount of 100,000 euros), low-security bonds and loan capital of 915 million euros, and other liabilities amounting to 69 million euros.