Crédit Agricole S.A. announces the sale of Emporiki to Alpha Bank

Crédit Agricole S.A. today announced that it has signed a contract for the sale of the entire share capital of Emporiki to Alpha Bank. The deal was approved by Crédit Agricole S.A.’s Board of Directors on 15 October 2012, said the bank in a statement.rnrnCrédit Agricole S.A. and Alpha Bank aim to complete the sale by 31 December 2012, subject to obtaining the authorisations from the relevant authorities. The terms and conditions of the transaction have already been approved by the Board of Directors of Alpha Bank and the Hellenic Financial Stability Fund.rnrnKey terms of the dealrnrnCrédit Agricole S.A. is selling the entire share capital of Emporiki group to Alpha Bank for one euro. As previously announced, prior to completion Crédit Agricole S.A. will increase its recapitalisation of Emporiki to €2.85 billion, having already injected €2.3 billion in July 2012. rnrnIn addition, it will subscribe to €150 million of convertible bondsrnto be issued by Alpha Bank, redeemable in Alpha Bank shares, subject to conditions and on Crédit Agricole S.A.’s initiative.rnrnCrédit Agricole S.A.’s funding to the entities to be sold amounted to €2.1 billion at the end of September 2012.rnrnThe recapitalisation of Emporiki and subscription for the convertible bonds to be issued by Alpha Bank will immediately reduce this funding by approximately €0.7 billion.rnrnIn addition, Crédit Agricole S.A. is examining the possibility of buying assets from Emporiki and Alpha Bank, which would reduce the amount of its residual funding to Emporiki accordingly.rnrnThe residual funding will be repaid in three installments, the last one scheduled for the end of 2014, and will be guaranteed by quality financial assets selected by Crédit Agricole S.A.rnrnFinancial impacts of the dealrnrnThe impact of the transaction will be recognised in Crédit Agricole S.A.’s income statement in the third quarter of 2012. It will reduce the group’s net income Group share by an estimated €2 billion, based on best estimates of all losses and costs arising as a result of the transaction until its completion.rnrnThe transaction forms part of Crédit Agricole S.A.’s strategy to strengthen its financial structure and continued refocusing on its core business in line with its strategic plan. Crédit Agricole S.A. deems that the cumulative effects of the transaction would assist it in reaching the solvency targets of Crédit Agricole Group at year-endrn2013 as previously announced.rnrnAs indicated at the time of entering into exclusive negotiations, the deal will help to consolidate the Greek banking system, which is an essential condition for the recovery of the country’s financial sector.rnrnAdvisers to Crédit Agricole S.A. are Nomura and Crédit Agricole CIB. Legal advisers are Clifford Chance and Koutalidis.