A quadruple profit for banks, FSF, shareholders and the Greek government is included in the ingenious banks’ plans of Warrants. Specifically, the plan was studied by Piraeus Bank and Alpha Bank and it will confer benefits to everyone involved: Banks will lower their shares with the exercise of warrants, the FSF will fill with funds, the shareholders will hold titles with larger earnings per share, and finally, the Greek government can attend the debt negotiations with yet another ace hidden up its sleeve. If, for example, 5-6 billion is given to the FSF, then the total funds would be 16-17 billion.

How the acquisition of warrants will be made

The warrants acquisition by banks, according to some information, may be modeled on the buyback. That is, a bank buys the warrants from its holders until it reaches an -example- rate of 10%. Then the FSF receives its funds, while the Bank cancels the corresponding shares. The result causes significant gains to shareholders since the banks will return to profitability, as more profits will correspond to fewer shares.

The advantage of the warrants buyback by the banks -compared to a buyback by the FSF- would be that if the fund was to move to public offers and they are unsuccessful, then one year must pass before another public offer is made. The acquisition, therefore, by the banks, will not only lead to a faster privatization, but also to a debt reduction, since the government will be holding a powerful bargaining tool when negotiations for the extension of the Greek debt, are had. Bankers have tabled the idea of buyback, claiming that it is the right moment, according to the current favourable conditions in the market.

Many European banks are coming to markets to raise capitals and are willing to have investors participate, until November, anyway, since that is when the Stress Tests will be taking place.