ATHENS (Reuters) - Greece’s biggest lender, National Bank (NBG) NBGr.AT, said on Wednesday that Canadian investment fund Fairfax Holdings (FFH.TO) was interested in acquiring a stake in it by taking part in a planned recapitalization.
Under the terms of cash-strapped Greece’s international bailout, its top four lenders must issue new shares by the end of April to replenish their capital after the losses they suffered in the debt crisis from bad loans and bond writedowns.
The European Union and the International Monetary Fund have set aside 27.5 billion euros ($37 billion) in bailout funds to invest in the new bank shares. But private investors must buy at least 10 percent of them or the lenders will be nationalized.
NBG said in a bourse filing that Fairfax was among other investors who had expressed an interest, without giving details.
Fairfax is controlled by investment guru Prem Watsa, known as the “Warren Buffett of Canada.”
Asked by Reuters to comment on NBG’s statement, Fairfax Vice President for Operations Paul Rivett said the company did not comment on specific investments but that it did participate in recapitalizations and was interested in Europe.
“We’ve demonstrated that we will participate in recapitalization, we’ve done that with the Bank of Ireland BKIR.I, which has turned out to be a tremendously successful investment with a great bank,” Rivett told Reuters.
Since taking over Fairfax in 1985, Watsa has built a reputation as a shrewd investor through moves such as betting against the U.S. housing market in the last decade and reaping huge profits when the market collapsed. He invested last year in beleaguered smartphone maker Blackberry (BB.TO) and is now its largest shareholder, with a 9.9 percent stake.
NBG has recently taken over its former biggest rival, Eurobank EFGr.AT. Greece’s central bank has estimated the two lenders’ combined capital shortfall at almost 16 billion euros.
Reporting by Renee Maltezou and Allison Martell; additional reporting by Frank McGurty; Writing by Harry Papachristou; Editing by Jane Merriman and Dan Grebler