Bank of Cyprus sells Romanian hotel stake

Troubled Bank of Cyprus, the island’s largest lender, said on Wednesday it has agreed to sell its stake in Romania’s Marriott Bucharest Grand Hotel to an Austrian firm for 95 million euros.

The bailed-in bank said the proceeds will enhance its liquidity.

BoC’s Romanian branch will sell its 35.29 percent stake in the hotel’s holding company to Austrian construction company Strabag.

Completion of the deal is expected by the end of September and no later than the end of October 2014, BoC said in a statement.

“The proceeds of the sale will enhance the bank’s liquidity position,” it added.

The disposal will lead to a book loss of 1 million euros but will improve the bank’s capital position by 7 million euros, BoC said.

The sale fits with the group’s strategy of focusing on core businesses and markets and disposing of non-core operations, it said.

“It is also in line with the group’s decision to gradually reduce its presence in Romania and finally exit the Romanian market,” the bank added.

In return for 10 billion euros in aid from international lenders, the island in March 2013 agreed to wind down its second-largest bank, Laiki, and impose losses on large depositors in BoC, its largest but undercapitalized lender.

These depositors were hit with a 47.5 percent “bail-in” charge as part of the restructuring package.

BoC is now trying to claw back money it lost during a period of rapid expansion.

[AFP]