Bulgaria Corpbank’s Owner Working With Oman On Restructuring Plan

The majority owner of Bulgaria’s troubled Corporate Commercial Bank (Corpbank) said on Monday it was working with Oman’s sovereign wealth fund and other interested investors to restructure the lender.

Corpbank’s fate has been in limbo since June, when a run on deposits prompted the central bank to seize control of it and close its operations, sparking the worst banking crisis in the poor Black Sea state since 1990s.

Tsvetan Vassilev’s Bromak owns just over half of Corpbank, the Balkan country’s fourth-largest lender. Oman’s sovereign wealth fund is the second-biggest shareholder with a stake of about 30 percent.

The central bank said on Friday it had asked the two shareholders to unveil plans for the bank’s rescue by the end of August.

“I believe we are close to unveiling a decision in principle for the bank’s rehabilitation that will fully comply with the legal requirements for capital adequacy and liquidity,” Bromak owner Vassilev said in a statement posted on his personal website www.vassilev.bg.

Two days after Bulgarian Interim Prime Minister Georgi Bliznashki said an unidentified fund based in Vienna had expressed interest in rescuing the bank, the central bank said it had sent letters to the two shareholders.

The central bank said in its statement that Bromak had not yet notified it of any initiative regarding support for Corpbank nor had Bromak sought information on the financial state of the lender.

On Monday, Vassilev said the central bank had not asked him to present a plan, branding this as an attempt to avoid responsibility for its handling of the case during special supervision.

Bulgarian prosecutors have charged Vassilev with embezzlement and said that an international warrant for his arrest had been issued.

Vassilev, whose current whereabouts are unknown, was locked in a public feud with a rival at the time of the run on Corpbank. He has repeatedly denied any wrongdoing and said the run was a plot hatched by his competitors.

“My role and attention in the current moment is focused on presenting an overall concept plan and coordinating the steps to exit the crisis by finding an adequate balance between capital adequacy and liquidity, including through the provision of liquid assets, which used to be financed by the bank so far, which would facilitate future investors in their decision to take part in the restructuring,” Vassilev said.

Also on Monday, Bulgaria’s Ombudsman Konstantin Penchev accused the central bank of inaction.

“The Bulgarian National Bank is in a state of total passivity on the case of Corpbank,” Penchev said.

“Unfortunately, we are going nowhere with Corpbank’s case. BNB keeps explaining that nothing can be done. This is not true.”

The central bank was not immediately available to comment.

Earlier this month, the central bank allowed some banking activities to resume so borrowers could repay loans to the bank but deposits remain frozen.