bne -

Following the lead of Bratislava which has objected vociferously to over bailout loans handed to Athens, the Slovak lender Postova Banka announced on May 9 it has launched an arbitration case against Greece over the haircut that bondholders were forced to accept last year.

Postova said it and shareholder Istrokapital SE are suing Greece at the International Center for Settlement of Investment Disputes (ICSID), accusing Greece of breaking treaties concluded with Slovakia and Cyprus in carrying out the bond swap.

"Greece adopted measures which broke international agreements," CEO Marek Tarda - who owns Istrokapital - said in a statement. "By doing that, it damaged the value of our investment. It is our duty to protect our investment and fight for our rights."

Investors were forced to take a 53.5% loss on Greek sovereign debt as Athens sought to cut debt and secure a Eurozone bailout. Postova Bank reportedly held Greek bonds with a nominal value of around €500bn, and lost approximately €275m due to the haircut.

The legal challenge comes a week after closely-held Slovak/Czech financial group J&T got the go-ahead from the Antimonopoly Office in Bratislava to acquire a majority stake in Postova. After receiving the go ahead on May 2, reports said the transaction would be completed within days. The deal was agreed in 2011, and will see J&T take 88% of the bank, with Istrokapital to get a stake in J&T in return.

Slovakia led protests against the huge rescue funds handed to Greece by the Eurozone. In 2010, it refused to stump up its €800m contribution to a €110bn EU bailout plan for the country, while late the following year, the government fell as it failed to push approval of the Eurozone's new rescue fund - the European Financial Stability Facility.