MUSCAT: An Omani sovereign wealth fund and other shareholders in Bulgaria’s Corporate Commercial Bank are seeking to stabilise the troubled lender and hope a feasible plan will be put together within three months, a fund source said yesterday.
Bulgarian Finance Minister Petar Chobanov spoke to the head of Oman’s State General Reserve Fund (SGRF) last week about the prospect of it helping out after a planned state bailout of the bank ran into opposition in Bulgaria’s parliament.
“The Bulgarians have agreed to work with the shareholders to provide a feasible working plan within a time frame of three months, as a substitute for the nationalisation option,” the source said, declining to be named under briefing rules.
The Omani sovereign wealth fund is potentially a key player in Bulgaria’s banking crisis because it owns 30 percent of Corpbank, which it bought in 2009.
Corpbank was forced into the control of Bulgaria’s central bank in June after customers, unnerved by reports of shady deals by the bank’s main owner, withdrew more than a fifth of its total deposits.
A subsequent audit showed activities at the bank “incompatible with the law and good banking practices”, according to the central bank.
Corpbank’s biggest shareholder, wealthy Bulgarian businessman Tsvetan Vassiley, has denied the allegations against him.
The SGRF source said any solution to Corpbank’s problems would not necessarily mean Oman investing more money in the bank.
Instead, he said, proposals included diluting Vassiley’s stake with funds from other international investors.
Another proposal is to reinforce Corpbank’s management board with independent experts, the source said, adding that the SGRF wanted to help stabilise Corpbank because of its important role in Bulgaria’s economy.
“Oman sees Bulgaria as a friend, and we are confident that the Bulgarian government and the other shareholders will work toward getting the best out of this delicate situation, and to reopen Corpbank with a more stable situation,” he said.
Bulgarian authorities previously estimated the cost of a public rescue of Corpbank at about 1.5-2bn levs (around $1bn-1.4bn).
The SGRF originally paid about $129m for its stake in Corpbank, according to a statement by the bank at the time. Although Oman is an oil exporter, the fund is not nearly as large as those of wealthier Gulf states.
The SGRF’s assets total about $13bn, according to an estimate by the Sovereign Wealth Fund Institute, which studies the industry.
Reuters
