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Wednesday 15th July 2020
Home News Leptos cuts deal with Bank of Cyprus

Leptos cuts deal with Bank of Cyprus

Leptos-Estates-CyprusBANK of Cyprus (BoC) reached an agreement with Leptos Estates, one of the island’s biggest developers, to restructure a loan worth several hundred million euros, the governor of the Central Bank of Cyprus said.

“Following many months of consultations with the customer and an in-depth analysis of the group’s financial situation and prospects, Bank of Cyprus reached a restructuring agreement in principle, subject to approval by the board of directors,” governor Chrystalla Georghadji said in a letter to Green party lawmaker Giorgos Perdikis dated March 20, 2015.

“Taking into account the insufficient collateral and the absence of floating charges, under the circumstances, we deem the restructuring offer satisfactory and just,” she said. “Note that the valuation of property collateral was carried out on the basis of existing residential zones with a building coefficient of up to 60 per cent”.

In a letter to the governor dated January 16, Perdikis said the value of the company’s non-performing loan, with which Leptos financed the construction of the Neapolis project in Yeroskipou, in Paphos, is €580m.

A floating charge is a security that has an underlying asset or group of assets which is subject to change in quantity and value.

A source familiar with the situation who spoke on condition of anonymity said that the outstanding amount was now less than what is reported as the company “made some payments a year ago”. No other details were provided.

Board approval is still pending, the source said.

4 COMMENTS

  1. CM Nov 2013

    The Leptos Group, the leading property developer, surpassed even Aristo: in the summer of this year its liabilities to BoC came to €510m. In 2011 it owed the bank €235m, and in January 2006, €84m.

    On Leptos, the memo notes that “despite the group’s problematic transaction performance [inability to service the interest on the loans], the bank continued to increase its loan exposure with the group without ensuring repayment.”

    So some head honcho at BoC gave his mate Leptos free rein to plunder the bank and without guaranteed or in fact any security. Now they are using a valuation method for some assets that are grossly over optimistic in the current circumstances. Will someone’s head roll or better still criminal charges – but hay this is Cyprus.

    it would be interesting to see just how much the BoC has written off in this case and how that has reduced the reserves they have to cover such eventuality. Little wonder John H is leaving. The local crooks will cover it up much more easily.

  2. Adding to my comment on a previous thread, why have the banks cut a deal with Leptos for a non-performing loan and will not be prepared to cut a similar deal for people who have individual non-performing loans on single plots ???

    Taking into account the insufficient collateral and the absence of floating charges on the Geroskipou development, which is stated in the above report, which person at the bank authorised this loan and why haven’t they been held to task.

    • @Steve R on 2015/04/24 at 5:13 pm – I doubt whether a single person would have approved a loan of such a magnitude. I imagine that it would have required board approval.

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