Банкеръ Weekly

Briefs

SOCIETE GENERALE TARGETS BIOCHIM

Biochim commercial bank's privatisation is the last chance for the Bulgarian capitals to get hold of a bank with reputation and traditions though with tarnished past. It is very important for each candidate-buyer to be well-aware of his exact acquisition purpose.NEFTINVESTBANK still ranks among the pretenders. The credit institution was on the brink of winning Biochim in 2000, but in the last minute ex-prime minister Ivan Kostov stepped in and made his deputy Petar Zhotev (executive director of the Bank Consolidation Company at the same time) cancel the deal. When the time comes the BANKER weekly will quote all reasons for the operation's failure.In the end of August, 2001, Mitko Subev, Chairman of the Supervisory Board of Societe Generale, realized it's high time for the Bulgarian bank capitals to be united in order to keep their market positions. Placing Biochim under the auspices of registered in our country commercial companies would have satisfied many. Yet this did not happen.According to Nelly Kordovska, present procurator of the Bank Consolidation Company (BCC), the French bank giant Societe Generale has sent a letter to BCC stating its interest in Biochim's privatisation. This letter proves that the sale of the state-owned bank will certainly not go along without conflicts. Two years ago the French came over their competitors for the Varna EXPRESSBANK and won quite easily. Now they are aiming at acquiring even greater stake of the Bulgarian banking market and they have obviously decided to take on the most aggressive way - by buying Biochim, the fourth biggest bank in the country. Perhaps only Vasko Raichev, chief partner in Deloitte Touche, won't be satisfied with the deal. His wife Lilia Raicheva is Director of the Sredetz office of Biochim, and hence forth auditors won't be allowed to certify balances of companies emplying their wives or husbands.BCC expects that other credit institutions except Societe Generale will also join the privatisation proceeding for Biochim. HEBROSBANK, BULBANK and the Austrian Raiffeisenbank have already declared intentions. A month ago the Deputy Prime Minister Nikolai Vassilev and the Minister of Finance Milen Velchev announced their expectations the applications for Biochim to be submitted by end of the year. However, bankers express concern this term is rather unrealistic for a very simple reason - no serious investor will launch a deal on Christmas and New Year's Eve. Especially if it is to be in the nervous Balkan region.Foreign candidate-buyers will also wish to get acquainted with the 2001 audited results of Biochim, which will be ready no earlier than April, 2002. If BCC seriously counts on offers by end of the year, then it will most certainly push off many foreign investors which rises suspicions that the sale has been agreed in advance, said the CEO of one of the biggest private credit institutions in Bulgaria to the BANKER weekly. He also added that a thorough survey of the legal and financial status (due diligence) of the state-owned bank will take more than just a couple of weeks.For years Biochim's managers did not dare provide for the bank's uncollectable receivables from several irregular borrowers including the owner of the Hrankov Castle Hotel in Dragalevtsi and the private military plant Arsenal, Kazanlak. If Biochim does not make provisions amounting to at least BGL10MN covering unpaid liabilities of at leats the first ten of its debtors, then it will hardly make its buyer happy by his acquisition.

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