Shareholders to Get Chance to Rescue Corpbank Before Govt Steps In - FinMin

Shareholders to Get Chance to Rescue Corpbank Before Govt Steps In - FinMin

The current shareholders of troubled Bulgarian lender Corporate Commercial bank (Corpbank) will get a chance to rescue the bank before the government steps in, finance minister Petar Chobanov said.
On Friday the central bank placed Corpbank, the fourth biggest lender in the country, under special supervision over risk of insolvency. Over the wekend the central bank said the government will inject capital into the bank in an attempt to rescue it.The capital of the banking group’s shareholders will be written off and their rights will be withdrawn, the central bank also said. The central bank has appointed two conservators at each of the two banks to evaluate their assets and liabilities within a ten-day period.
On Monday Chobanov said that the government will step in only if the current shareholders fail to come up with the resource needed to support the group.
Local company Bromak, owned by businessman Tsvetan Vasilev, holds 50.66% of the voting rights of Corpbank and the State General Reserve Fund of the Sultanate of Oman, through its subsidiary Bulgarian Acquisition Company II, Luxembourg, holds 30.354% of the voting rights. A unit of Russia's VTB acquired 9.9% of Corpbank in 2013.
Chobanov added that talks are already underway with VTB and the Omani fund.
Speaking at a news conference on Friday, central bank governor Ivan Iskrov stressed that Corpbank is not bankrupt. The idea is to remediate it, cut its capital if deemed necessary, and then possibly hold talks with potential buyers, he added.
Corpbank will reopen on July 21.

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