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LONDON, April 18 (Reuters) - Bank of Cyprus said it had completed the sale of its loss-making Ukrainian subsidiary to Russia’s Alfa Group for 202.5 million euros ($280 million), a 10 percent discount from the price in the original agreement.
Ukraine’s economic and political uncertainty with February’s overthrow of Moscow-backed Ukrainian President Viktor Yanukovich led Alfa Group to revise the initial offer, announced in January, of 225 million euros, for the PJSC Bank of Cyprus unit in Ukraine.
Alfa Group, Russia’s largest privately owned banking group, said instability in Ukraine, where it has significant exposure, was hurting its financial position. Alfa’s ABH Ukraine Ltd is buying the Bank of Cyprus subsidiary.
Bank of Cyprus has six Russians on its 15-person board of directors after converting large deposits, many held by Russians, into equity to avert a collapse last year - a condition of Cyprus’s international aid package.
The lender has been trying to withdraw from non-core markets ever since.
In addition to the Ukraine deal, Bank of Cyprus also said ON Friday it had sold its stake in Romanian affiliate Banca Transilvania as part of a process of deleveraging overseas.
“I am pleased that both transactions have been completed at a faster pace than anticipated and, in particular, that we completed the sale of our Ukrainian business at an acceptable price despite the country’s current uncertain economic and political environment,” Chief Executive John Hourican said in a statement.
“Overall the bank remains on track in the delivery of its broader strategic objectives, supported by a gradual improvement in the economic and operating conditions in Cyprus,” he said. ($1 = 0.7228 Euros) (Reporting by Michael Holden; editing by Jane Baird)