Банкеръ Weekly



The general meeting of shareholders in the Central Cooperative Bank (CCB) was panic-stricken when it became clear that the representative of the Bank Consolidation Company (BCC) Svetlina Kortevska was not authorized to vote for one of the proposed changes in the bank's statutes. Unquestionably, the proposed increase of CCB's capital to BGL25MN is of primary importance for the future of the credit institution. Having in mind that an audit of Bank Supervision established that the capital increase is imperative, and less than a month ago Deputy Premier Peter Jotev said that would stabilize the bank, it is strange why the Board of Directors of BCC (which holds a 32.78-percent stake in the CCB did not authorize its representative to vote for the capital increase.
In the last few months the change in CCB's statutes was the mostly discussed problem regarding the credit institution. More precisely, this is the possibility of not taking all important decisions for its development by a majority vote of two thirds of CCB's shareholders. Many financiers thought that one of the bank's major shareholders - the Central Cooperative Union (CCU) - would oppose the changes in CCB's statutes, required by the BCC. The Central Cooperative Union holds 23.45% of the bank's capital and insists to have a casting vote in taking the decisions. This time, however, in defiance of all predictions, the State and the private shareholders shook hands. They joined around the proposal to write down in CCB's statutes that all important decisions for the bank's development shall be made by a majority of 50% plus 1 vote, instead of a 67% majority as it was so far. The successful sale of CCB will to a large extent depend on the approval of that proposal.
The general meeting approved BCC's proposal for changing CCB's one-tier management system to a two-tier structure with a Supervisory Board and a Management Board. On BCC's proposal again, the 3-member Supervisory Board of the CCB included one representative of each of its biggest shareholders - the BCC, Corporative Bank, and the CCU. Thus, the BCC as a juristic person, CCU's Chairman Pancho Ivanov, and the lawyer Rada Hristova - proposed by Corporative Bank and Fininvest - entered CCB's Supervisory Board. The first meeting of the newly-elected Supervisory Board is scheduled for July 3, 2001, when it will be decided who of the bank's present executive directors will continue to govern it.
In financial circles it is commented that the incumbent Finance Minister Muravey Radev will be BCC's representative, and the Management Board of the credit institution will consist of 6 members. The Executive Director Georgi Kostantinov will definitely be appointed to the new Management Board, while Donka Gruncheva from the Ministry of Agriculture will certainly withdraw from the management, as she said herself. It cannot be said for sure if the present Executive Director of CCB Tencho Tenev will remain on the Management Board. The representative of the State Insurance institute DZI (which holds 1.2% of CCB's shares) Maria Ivanova will probably quit as well. It is maintained that CCU's representative Alexander Vodenicharov will not stay in the management either.
Two of CCB's major shareholders - the BCC and Corporative Bank - are presently willing to sell their stocks. And while BCC's Board of Directors delays its decision for a joint sale of their shares in CCB, the managers of the Corporative Bank are not inclined to wait until the new cabinet is constituted. All the more that according to BNB's requirements they have to sell their share participation in CCB by end-August, 2001.
Corporative Bank's Chief Executive Director Tsvetan Vassilev said to the BANKER weekly that the credit institution which he manages and Fininvest (holding a 4.63-percent stake in CCB) are currently holding talks with three or four candidate-buyers, who are ready to offer good prices for the shares. According to Mr Vassilev, the buyer will be neither Raiffeisenbank (Bulgaria), nor the owner of EUROBANK, Slovakia's fund Istrocapital.
Back in the beginning of April 2001 it was commented in financial circles that the BCC received a letter from the London-based
Hunger and Agricultural Aid Foundation, which announced interest in purchasing the majority package of shares in the Bulgarian credit institution. However, the fund's chances of acquiring the CCB are only hypothetical.
As the BANKER wrote, CCB also attracted the attention of the present owners of Chimimport. In November 2000 the company was purchased by Fertiton Inc, registered on the Viginia Islands.
After the change of ownership, Chimimport's management was entrusted to Dimiter Atanasov Kalchev and Ivo Kamenov Georgiev. The latter is a co-partner in several companies with Marin Mitev and Tihomir Mitev (both of them are bosses of the Varna strong-arm TIM group), who are the real owners of Chimimport, according to some businessmen. This gives some bankers grounds to claim that TIM's bosses now want to include a bank in their empire and have, therefore, targeted CCB.
Whoever wants to buy CCB's shares held by Corporative Bank and Fininvest should offer a purchase price exceeding BGL0.75 apiece. According to Tsvetan Vassilev, this is the minimum price, set by Corporative Bank's managers in their draft proposal to the BCC for joint sale of the majority packages in CCB.
CCB's general meeting of shareholders also approved the annual accounting report of the financial institution and decided to place its BGL47,000 profit for 2000 in the Reserves Fund. Deloitte Touche was nominated to carry out the bank's audit.

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