Oman Fund 'Drafting Plan for Bulgaria's Corporate Commercial Bank'

A plan to save Bulgaria's Corporate Commercial Bank is in preparation at the State General Reserve Fund (SGRF) of Oman, a fund source argues.

It is expected to be ready within three months, the website Gulf Business quoted the source as saying.

The report follows phone talks held Friday between Bulgarian Finance Minister Petar Chobanov and SGRF CEO Abdulsalam Al-Murshidi.

The two discussed options to solve capital shortages at the Corporate Commercial Bank (KTB), Bulgaria's fourth-largest lender which Bulgaria's central bank BNB is planning to close down, with its subsidiary Credit Agricole Bulgaria being taken over by the state.

Chobanov then announced in a message to the media that the government would provide the necessary conditions to KTB shareholders if they wish to help with capital.

According to the sovereign wealth fund's source, Sofia has agreed "to work with shareholders to provide a feasible working plan within a time frame of three months, as a substitute for the nationalization option".

He stressed, however, that the plan did not necessarily include investing more money into the bank, and also that options such as diluting majority share holder Tsvetan Vasilev's stake, as well as boosting KTB managerial board with independent members, were also on the table.

The prospect that the state could step into Credit Agricole Bulgaria, where "good" KTB assets are to be transferred, has divided opinions among Bulgarian lawmakers.

Current estimates suggest BGN 1.5 to 2 B (EUR 0.75 to 1 B) should be spent to bail out the bank if the government chooses to take that step.

This is far beyond the USD 129 M (EUR 95.3 M) that the SGRF paid to acquire nearly a third of CorpBank.

The Oman State Fund, which is among the state-owned entities concentrating excess oil revenues, has held a 30-percent stake at KTB since 2009.

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