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UPDATE 1-Shareholders to submit rescue plans for Bulgaria's Corpbank, says central bank
September 1, 2014 / 4:22 PM / 3 years ago

UPDATE 1-Shareholders to submit rescue plans for Bulgaria's Corpbank, says central bank

(Adds official quotes, details)

SOFIA, Sept 1 (Reuters) - The two biggest shareholders of Corporate Commercial Bank (Corpbank) have pledged to submit rescue proposals for Bulgaria’s fourth-largest lender, the country’s central bank said in a statement on Monday.

Corpbank was hit by a run on deposits in June, prompting the central bank to seize control and shut down its operations, pending the outcome of an audit due to completed next month.

The central bank had asked the main shareholders to present a concrete proposal for possible capital and liquidity support for the troubled lender by the end of August.

“We have received answers that do not contain concrete proposals and financial engagements but in which principle intentions for possible future actions are declared,” the central bank said on Monday.

The main owner of Corpbank, businessman Tsvetan Vassilev, has told the central bank that an investment company will submit a rescue proposal within days, according to the statement.

Bulgarian prosecutors have charged Vassilev with embezzlement and issued an international warrant for his arrest. A Bulgarian court has also frozen his assets, following the charge. Vassilev, whose whereabouts are unknown, had denied any wrongdoing.

Separately, Oman’s sovereign wealth fund, which owns about 30 percent of Corpbank, will set up a consortium to make a rescue offer, it said in a letter to the central bank.

The Omani proposal will be based on the assessment of the bank’s assets, which the central bank administrators are currently conducting, due diligence and also adequate state support by the government, the central bank said.

Though the central bank said it would keep up a constructive dialogue with the shareholders, it added that their answers confirmed “the undisputable fact that in this case there are no quick solutions”.

It was not immediately clear whether Vassilev and the Omani fund will act together or separately, or whether their intentions included the unidentified Vienna-based fund that has already declared interest in Corpbank’s rescue.

Depositors at Corpbank, as well as number of local economists, have accused the central bank of being too slow in finding a solution for the bank, the troubles of which triggered the biggest banking crisis in the Balkan country since the 1990s.

Under their pressure and after meeting European Commission officials, the interim finance minister has said Bulgaria was considering whether to allow partial access to deposits held by the lender as early as this month. (Reporting by Tsvetelia Tsolova; Editing by David Evans and David Goodman)

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