National Bank of Greece (ADR) (NYSE:NBG)’s recapitalization plan apparently interests Prem Watsa. The investor’s fund, Fairfax Financial Holdings Ltd (TSE:FFH), wants to acquire a stake in NBG through the bank’s recapitalization.
The potential investment certainly makes a lot of sense, as Watsa has sizeable stakes in a number of other Greek companies, like Eurobank Properties and Sarantis.
Reuters reports that the terms of Greece’s international bailout call for the top four lenders in the nation, which includes National Bank of Greece (ADR) (NYSE:NBG) as the largest lender in the nation, to issue new shares by the end of next month. The issuance of those shares would increase the banks’ capital after the losses they sustained due to the debt crisis in Europe.
Stone House Capital Partners returned 4.1% for September, bringing its year-to-date return to 72% net. The S&P 500 is up 14.3% for the first nine months of the year. Q3 2021 hedge fund letters, conferences and more Stone House follows a value-based, long-long term and concentrated investment approach focusing on companies rather than the market Read More
The International Monetary Fund and the European Union have earmarked about $37 billion to make investments in the banks by purchasing the new shares. However, at least 10 percent of those shares must be purchased by private investors like Prem Watsa. If private investors don’t buy at least 10 percent of each lender’s new shares, then the banks will be nationalized.
National Bank of Greece (ADR) (NYSE:NBG) announced Prem Watsa’s interest in the shares in a recent bourse filing. The bank also named other investors, but it did not give further details.
Reuters contacted Fairfax Financial Holdings Limited (TSE:FFH) and was told that although the firm doesn’t comment directly on specific investments, it does have an interest in European companies and does participate in recapitalizations. The firm’s vice president for operations said they invested in the Bank of Ireland (NYSE:IRE) (LON:BKIR) in a similar way, and it “turned out to be a tremendously successful investment.”