Sat, May 26 2012

Bulgaria's banking sector heads for restructuring

Thu, Oct 14 2010 08:33 CET

byDnevnik.bg

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Bulgaria's banking sector heads for restructuring

Photo: Reuters

Bulgaria's banking sector is likely to experience a reshuffle, which will mainly affect smaller financial institutions folowing suit with the restructuring of the European market caused by the financial turmoil, Dnevnik said.

The move will affect the Bulgarian arm of Nova Ljubljanska Banka (NLB), NLB Bank Sofia, as part of the Slovenian bank's measures to secure 250 million euro to replenish its capital. The Slovenian lender will keep its divisions in Montenegro, Macedonia, Kosova and Bosnia and Herzegovina.

NLB Bank Sofia confirmed its parent's plans to sell the unit, with a possible deal expected within up to two months. The Slovenian bank has allowed three potential buyers to conduct due dilligence on its Bulgarian arm, but no takeover bids have been submitted so far.

The financial crunch has also forced Allied Irish Banks to dispose of its 49.9 per cent stake in Bulgarian American Credit Bank (BACB), which hopes to find investor by March 2011.

US investment company Gramercy, which holds 30.92 per cent in the bank though its Gramercy Emerging Markets Fund, is also examining the posibility of exiting the financial institution.

The restructuring wave will also see Liechtenstein-based company Paton Anstalt and individual investor Pavlina Naydenova sell their respective 27.33 per cent and 17.53 per cent stakes in lender Teximbank. The deal will be carried through the conversion of debt into equity, according to industry sources.

A stake of up to 33 per cent in Teximbank will be bought by local military engineering group Arcus, which has already obtained approval from central Bulgarian National Bank (BNB) for the deal.

Source: Dnevnik.bg

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