Bulgaria's Corpbank Mulls Foreign Stock Exchange Listing

Bulgaria's Corporate Commercial Bank became known as the government's favorite bank in 2010 after data showed that it holds nearly half of the deposits by state-run companies. Photo by BGNES

Bulgaria's Corporate Commercial Bank, which holds nearly half of the deposits by state-run companies, is planning to float on a foreign stock exchange.

The issue will be put to the vote at the shareholders' meeting on April 25.

Among Bulgarian companies which have already launched IPOs on a foreign bourse – namely the Warsaw Stock Exchange (WSE) – are pharmaceuticals producer Sopharma, real estate investment trust (REIT) InterCapital Property Development and industrial group Eurohold Bulgaria.

Monbat, a car battery maker, Enemona, an engineering and construction company specializing in energy efficiency improvements across a wide range of public buildings, and Kaolin, a mineral extracting and processing company are also considering the option of carrying out a dual listing.

Last month the European Commission launched an investigation against Bulgaria on allegations of liquidity support to Corporate Commercial Bank, which is believed to finance the media group of mogul Irena Krasteva.

The document, obtained by Trud daily, obliges Bulgaria's government to reply to thirteen questions and provide information on the relationship history of Corporate Commercial Bank (CCB) with the state owned companies, which have deposited funds in CCB.

The letter has been sent by the European Commission Competition DG to the Permanent Representation of Bulgaria in the European Union on December 21, 2011.

The European Commission launched the investigation following an anonymous tip-off received in Brussels in the autumn of 2010, according to the report.

The letter makes it clear that the EU executive has been gathering information on the issue nearly a year.

Bulgaria's Corporate Commercial Bank holds nearly half of the money of strategic state-owned companies, it emerged in the middle of 2010 under pressure from the media.

The data was provided by Finance Minister Simeon Djankov at the request of the editors-in-chief of eleven of the biggest print media in Bulgaria, who approached the department, citing the law for access to information.

The data showed that nearly 65% of the monies of Bulgaria's top 18 state-run companies are managed by three banks, whose market share does not exceed 9% - Corporate Commercial Bank (48%), EIBank, where the prime minister's long-time live-in girlfriend Tsvetelina Borislavova held a 18% stake and the Central Cooperative Bank.

The eighteen companies listed included the Bulgarian energy holding and its units (gas monopoly Bulgargas, gas pipeline operator Bulgartransgas, state power utility NEK, nuclear power plant Kozloduy, thermal power plant Maritsa East II), as well as tobacco monopoly Bulgartabac, Bulgaria Posts, Sofia Airport, the Bulgarian Railways Company.

The top companies deposited in banks BGN 856 M by the end of the first quarter of the year 2010, BGN 408 M of the monies was deposited in CCB.

Acting on the suspicious revelations, Bulgaria's finance ministry issued new criteria for attracting deposits from strategic state-owned companies and promised to update the information regularly, but failed to do so.

According to high-ranking governmental officials, speaking on condition of anonymity to local media, there has been no significant change in the data about the banks which serve state-controlled enterprises in 2011 in comparison with last year and CCB continues to hold the biggest share of the money of strategic state-owned companies.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!