Moldova looks to wrap up Moldindconbank sale before February election

Doverie United Holding AD

30/01/2019 11:13

By Matthias Williams and Alexander Tanas
    CHISINAU, Jan 30 (Reuters) - Moldova's bid to sell
Moldindconbank, the country's second-largest bank, faces delay
if it cannot be concluded before a Feb. 24 parliamentary
election, Central Bank Governor Octavian Armasu told Reuters. 
    Last week the central bank announced it had given permission
to Bulgarian fund DOVERIE United Holding  5DOV.BB  to buy a 64
percent stake in Moldindconbank.  urn:newsml:reuters.com:*:nL8N1ZM5J7 
    But opinion polls suggest no party will win an outright
majority in the election, setting the scene for months of
coalition talks and there needs to be a functioning government
in place for the sale to be approved.
    Moldovan President Igor Dodon has told Reuters he is ready
to call snap polls again if no viable government formed.
 urn:newsml:reuters.com:*:nL8N1ZN27B
    And under Moldovan law, if the sale does not go through by
April then shares in Moldindconbank can be sold on the open
market and the price progressively reduced if no buyers emerge.
    "There is a risk that we will not have a government by that
date (April)," Armasu said. 
    "That is why I say the window of opportunity is quite
narrow."
    DOVERIE's press office said the deal was a good opportunity
but said a "complicated procedure" lay ahead. "We cannot commit
to specific deadlines and results," a spokesman said. 
    The government is seeking to sell Moldindconbank to a
foreign investor as part of a clean-up of the financial system
backed by the International Monetary Fund and other donors after
a $1 billion bank fraud plunged the country into crisis in
2014-2015. 
    The central bank froze shares of Moldindconbank in October
2016 believing its ownership structure was opaque. 
    "My major concern is that (if no viable foreign buyer is
found) then we don't know what kind of investors we are
getting," Armasu said. 
    "Then it's a big risk of getting an orchestrated takeover of
the bank. I see this alternative as a very dangerous one. So,
I'm really happy that we managed to find an investor at the last
minute which we believe is good enough to buy this bank."
    Moldovan authorities have worked to restore faith in the
financial system after the disappearance of $1 billion from
three banks with opaque ownership structures.
    Known locally as the "theft of the century", the scandal
triggered street protests, the IMF and the European Union froze
aid, the leu currency plunged to record lows and inflation
climbed to double digits.
    Since that time, Moldova has sold stakes in its largest and
third-largest banks to foreign investors. 
    "I would say the situation radically changed. We have not
finished yet but I would say 75 percent of the banking system
today is in good hands," Armasu said. 

 (Additional reporting by Tsvetelia Tsolova in Sofia; editing by
Jason Neely)
 ((matthias.williams@thomsonreuters.com;))