Banco Santander has placed, in amount of 764,030,000, a total of 7,640,000 of loyalty bonds destined to compensate former shareholders of Popular who lost ir investment after liquidation of that bank and are now customers of entity Who presides over Ana Botin. The placement means reaching 77.88% of expected maximum. The acceptance period ended last December 7th.
Specifically, y are customers of Popular who bought shares during May 2016 capital increase or subordinated obligations in July 2011. Both assets were worth zero euros on June 6 when Popular went bankrupt and was bought by a euro by Santander, incorporating 2 billion of its own resources. "In accordance with provisions of securities note, delivery of loyalty bonds to offer acceptors will take place today", he has communicated to National Securities Market Commission (CNMV).More information
- Santander buys Deutsche Bank retail banking in Poland for 305 million
- Santander agreed departure of 1,100 employees including under 50 years
- Brussels will consult with Santander if it offers more information on sale of Popular
- Santander won 5.77 billion to September, 10% more
The bank's offer presided over by Ana Botin was aimed "exclusively at retail customers, wher individuals or companies". According to Santander, 99% of m acquired titles of Popular for less than 100,000 euros. In this case, y would receive 100% of investment. For stretch between 100,000 and 500,000, 75%; Between 500,000 and 1 million, 50%. From million, nothing can be recovered.
For those who exceed 100,000 euros will apply this system: for example, for an amount of 250,000 euros, 100% will be paid for first 100,000 and 75% for second 150,000, which will be compensated by 212,500. And so in rest of cases.Very specific conditions
In addition, strict conditions were required to receive compensation. First, investment should be deposited in Popular in Spain or Santander at time of resolution. The offer excluded institutional investors or members of Popular Council.
In addition to renouncing to take legal action, those who wish to avail mselves of this system of compensation have had to sign and write of ir fist and letter that renounce any action against Santander and that y understand risk of product y acquire. Finally, y will have to maintain, when se loyalty bonds are delivered, an "equivalent" business relation in volume of money to which y had when y bought shares or subordinated obligations.
With this movement, Santander tries to achieve several objectives: to retain customers, to bring money that could be taken from Popular during weeks of panic and content employees who went to last expansion of capital and have lost All. Maintaining strength of commercial business of Popular is key for Santander to maximize this purchase. At same time, it tries to curb a possible barrage of judicial claims. However, Santander discards institutional investors, which according to doctrine of Supreme Court, are qualified agents with or knowledge and interests different from those of small shareholders, according to an argument used in crisis of Bankia.Perpetual obligations
These new bonds with which Santander compensate se shareholders will be perpetual obligations (similar to those known as Cocos) issued by Santander, with 100 euros of nominal value, which can be amortized from seventh year at will of own Entity and with previous approval of ECB. This voluntary in amortization has been criticized by law firms. The bonds are quoted in fixed-income market, so your owner will be able to sell in advance, although if you do, you will have discounts, so you only achieve full profitability if you wait seven years.
Santander explained that although it will issue up to 980 million in bonds, maximum cost to be assumed is 680 million euros, which will have no impact on income statement or capital of group, since it was provided at time of purchase of Popular.