PIRAEUS BANK READY TO BUY EUROBANK
The Greek Piraeus Bank has filed to the Bulgarian National Bank (BNB) an application for allowing it the purchase of 99.7% of EUROBANK's shares, which are still legally owned by Petrol Holding. What is strange in this case is that the buyer has started the procedure of gathering permissions backwards, which explains the number of considerable documents missing in the package sent to the BNB. For example, Piraeus Bank has not presented a permission to invest in EUROBANK from the central bank of Greece. There is neither a stance from the Bulgarian Commission for Protection of Competition (CPC), stating that the purchase of the domestic bank won't result in Piraues Bank gaining a dominant position on the financial market in this country. CPC's stance is part of the obligatory procedure for each deal when a Bulgarian credit institution is acquired. Without the written permissions from the National Bank of Greece and the CPC, the BNB may not start a procedure for considering Piraues Bank's application for the purchase of EUROBANK.There can be no doubt that Piraeus Bank, which is the fourth largest financial group in Greece, will get all necessary permissions. But the BNB will consider and probably satisfy its application for acquiring 99.7% of EUROBANK's shares only after the required documents are submitted. The purchase agreement was signed on January 24, 2005 by the Chairman of the Greek bank Mihalis Kolakidis and Mitko Subev, BoD Chairman of the seller, Petrol Holding, and head of EUROBANK's Supervisory Board. Piraeus Bank is ready to pay EUR45MN for the Bulgarian credit institution. That, however, will happen only after the deal is approved by the BNB.The agreement between the seller and the buyer of the Bulgarian bank includes no clause, stipulating that part of the money for the deal should be deposited into an escrow account as a guarantee in case the new owner finds irregularities in EUROBANK for which it has not been informed in advance. Moreover, Piraeus Bank and Petrol Holding have agreed that the Bulgarian EUROBANK would expand its cooperation with the holding's two subsidiaries - Petrol AD and Transcart. Petrol AD is the top fuel distributor in Bulgaria. Its shares are listed on the stock exchange, and its major shareholders are Petrol Holding, with a 77% stake and Ros Oil, with a 14% stake. Transcart is the company which issues credit cards for the purchase of goods and services. Petrol Holding owns 50% of the Transcard, and the other 50% are in the hands of the technological company SYSTEC.When the deal for the purchase of EUROBANK is finalized - expected to happen in May, 2005 - Piraeus Bank will be controlling financial assets worth BGN900MN-plus in Bulgaria. In the end of 2004 the balance sheet value of EUROBANK was BGN425.MN, and that of Piraeus Bank's Sofia branch was BGN426.4MN. The amount of loans extended by the Bulgarian bank and the Greek bank's branch in this country totalled BGN597MN, while the aggregate sum of money they attracted from citizens and firms was BGN754MN.