Greece’s Alpha Bank has frozen merger talks with Eurobank pending the conclusion of negotiations between the government and private creditors on a sovereign debt write-down.
Alpha and EFG Eurobank agreed in August to create Greece’s biggest bank, to better cope with the debt crisis.
“The bank intends to await the finalization of the terms of the (debt write-down) and shall then convene the bank’s general meeting of shareholders, so that the latter can be duly informed and resolve upon (the course to follow) accordingly,” Alpha Bank said in a statement.
Following an agreement in October that increased the debt write-down to 50 percent, Alpha Bank pointed out that the merger would have been based on a milder debt write-down agreed by the eurozone in July that required banks to accept a 21-percent loss.
The bank added that the attempted bond swap, designed to erase around 100bn euros ($132bn) from Greek debt held by private creditors globally, was expected to affect it and Eurobank in a “disproportionate” manner.
The merger plan, originally slated for completion in December, was designed to create Greece’s largest lender with major backing from a Qatari investment fund.
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