NAFTEX PETROLEUM TO BUY EUROBANK
Naftex Petroleum (Bulgaria) starts negotiations with the Slovak fund Istrocapital for the purchase of its subsidiary Eurocapital Bulgaria which holds 85.35% of EUROBANK's capital. The information was confirmed for the BANKER weekly by Mitko Subev, BoD Chairman of Naftex Petroleum. If the negotiations are successfully concluded, the company will take control over EUROBANK without needing an explicit permission from the Bulgarian National Bank (BNB). Financiers, acquainted with the demands of the Slovaks, claim that they would insist to get about BGN26MN for Eurocapital Bulgaria. If the deal is closed, Naftex Petroleum (Bulgaria) will be controlling two bank institutions - EUROBANK and NEFTINVESTBANK.Presently, Naftex Petroleum (Bulgaria) holds 16.78% of NEFINVESTBANK's shares. The company Petrol AD has got BNB's permission to acquire 59% of the same bank's capital. At the same time, 90% of Petrol's stocks are in the hands of Naftex Petroleum (Bulgaria).Directly and through Petrol AD we'll hold more than three thirds of NEFTINVESTBANK's capital. Of course, we notified the BNB about that and received the respective permission from the central bank, Mr. Subev explained. However, he refused to comment on the matter if the two credit institutions would merge after Naftex Petroleum acquires EUROBANK. Initially, they will remain independent and afterwards the managers of Naftex Petroleum (Bulgaria) will decide on their further development. If Naftex Petroleum succeeds to buy EUROBANK, the company will considerably expand its positions on the Bulgarian financial market. NEFTINVESTBANK's balance sheet value exceeds BGN91MN, and if Naftex Petroleum acquires EUROBANK, the aggregate amount of their assets will reach some BGN270MN.Since the spring of 2000 Naftex Petroleum (Bulgaria) has been trying to expand its positions in the banking sector. It raised NEFTINVESTBANK's capital in order to enable it to apply for the first competition for the privatisation of Biochim Commercial Bank. The Bank Consolidation Company (BCC) even declared the bank exclusive buyer. However, the relationship between Denis Ershov, owner of Naftex Petroleum (Bulgaria), and the government of former premier Ivan Kostov suddenly deteriorated in July. The National Security Service announced that Ershov was dangerous for the Bulgarian national interests. The businessman was forced to leave the country and was deprived of the right to enter it in the following ten years. Logically, in September 2000 BCC turned down the offer, submitted by NEFTINVESTBANK, and declared its intention to invite another privatisation procedure.Probably at that moment the managers of Naftex Petroleum (Bulgaria) turned their attention to EUROBANK, as it was well known that the Slovak fund was planning to sell it. In the end of 2000, Istrocapital launched negotiations with a consortium of foreign financial institutions - Commerzbank, EBRD, IFC, Deutsche Investitions und Entwiklung Gesellschaft, and the international microcrediting fund IMI, for the sale of EUROBANK. The talks were nearly over and the candidates were ready to pay BGN20MN, when in March 2001 Emil Angelov, Executive Director of NEFTINVESTBANK, was appointed to preside the Management Board of the bank. He advised the Slovaks to raise the price of their bank to BGN24MN, but the foreign investors did not accept it and the deal was broken.Later, in September 2001, the same consortium established ProCredit Bank. Emil Angelov remained on top of EUROBANK, but also kept his position on NEFTINVESTBANK's Management Board and he is still a member. Back in April 2001 the BANKER weekly wrote that according to financial experts, EUROBANK had already been acquired by the shareholders of NEFTINVESTBANK, but the deal would be announced in a more favourable political situation. Obviously, the right moment has come.