Gold Magazine April - May 2013, Issue 25 | Page 21

€100.000, then the resolution measures are not applicable to this client.
If the sum of the balances of loans and
credit facilities is less than the deposits
exceeding €100.000, then the following apply:
(b) 37.5% of this difference is automatically converted into Class A shares
of the Bank of Cyprus, with voting
rights and dividends.
(c) 22.5% of this difference is temporarily ‘frozen’ and possibly part or the
whole of it will be converted into Class
A shares of the Bank of Cyprus with
voting rights and dividends for the purposes of the bank’s resolution. In this
regard, an independent valuer will be
appointed for the valuation purposes
of the Bank of Cyprus. Not later than
90 days from the completion of the
valuation, all or part of that percentage
might be converted into shares and the
remainder returned to the depositor.
To the extent that the 22.5% will be
re-deposited, the interest will be calculated retrospectively together with a
small increment.
(d) The remaining 40% of the difference was temporarily ‘frozen’ for
liquidity purposes. Subsequently 10%
of this was unfrozen. However, interest
continues to be calculated for this deposit based on the existing interest rate,
plus an increment of 10 basis points.
This amount will be ‘unfrozen’ in a
short period of time and will not be
used for resolution purposes.

After the Setback,

Recovery is the

Only Option

W

e put a number of questions to professionals working in
all areas of the services sector about how they expect
the bailout agreement and the resolution of the banking crisis to affect their work and their clients’ business
and investments. Their responses reveal varying degrees of optimism
– and pessimism in a couple of instances – but the overriding impression is that Cyprus and their specific sector will recover, though it will
take a great deal of effort and hard work. Moreover, the undoubtedly
painful measures that have been taken will eventually be seen as
necessary corrections to problems that have been mounting over the
years but remained unresolved.

S WHO
WHO’
Christis M Christoforou
Chief Executive Officer,
Deloitte Limited
Andrew Demetriou
Director Ioannides Demetriou
L.L.C.
Marios Klitou
Chief Executive Officer,
Baker Tilly, Cyprus 

Oren Laurent
President,
Banc De Binary
Dr George Pamboridis
Senior Partner, 
Pamboridis LLC
George Theocharides
Associate Professor of Finance,
CIIM

❻ The current capital of the Bank of


Cyprus (shares, securities convertible into shares, bonds) is converted into new shares:
• Existing ordinary shares are converted
into new Class D shares.
• Existing securities which are convertible into shares are converted into new
Class C shares.
• Existing bonds are converted into
new Class B shares.
• Voting rights and dividends for the
above-mentioned new classes of shares
(B, C, D) may be exercised only if the
total dividends to be given to holders
of Class A shares reach the original
contribution plus interest at an annual
rate of EURIBOR-3 months plus 10%.
• Class A shares have full voting rights
and dividends.

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09/04/2013 14:23