Bulgaria's Fibank cuts price, increases number of shares it plans to issue (updated)

First Investment Bank AD

23/04/2020 15:36

(Adds bank's reasons for price change)
    SOFIA, April 23 (Reuters) - Bulgaria's First Investment Bank
(Fibank)  5F4.BB  has cut the price and almost doubled the
number of shares it plans to issue to raise 200 million levs
($110 million) to help it cover a capital shortfall found by ECB
stress tests last year, the prospectus showed. 
    Fibank's capital increase is the last box Bulgaria has to
tick before it can get the nod to enter the European Union's 
banking union and the "waiting room" to join the euro. Sofia
wants to apply to join both at the end of April.  urn:newsml:reuters.com:*:nL5N2BY1B4
    Bulgaria's fifth-largest lender has given up plans to sell
25 million new shares at 8 levs per share and instead opted to
issue 40 million new shares at 5 levs per share.  urn:newsml:reuters.com:*:nL5N2C44EW
    The new plan received a green light from the country's
financial regulator on Thursday.  
    The bank said in a statement it decided to cut the issue
price to better reflect the current market price and attract
more investors.
    Fibank will consider the issue a success if as few as 4
million shares are sold. Shareholders will have the right to buy
one new share for every 2.75 held, the prospectus said.
    The trading of rights and subscription of new shares is
expected to start around June 12 and the capital increase be
registered by the end of July, the document showed. Trading in
new shares should commence in the middle of August.    
    The stakes of Bulgarian businessmen Tseko Minev and Ivailo
Mutafchiev, each owning 42.5% of the lender, would be diluted
after the issue, but the two would remain majority shareholders,
the document showed.
    The remaining 15% is floated on the Sofia bourse.   
    Shares of the bank, which has total assets of 10.7 billion
levs, jumped by 23.15% to 2.66 levs by 1410 GMT.
     The new price of 5 levs per share still represents a
premium to the current market price, with traders saying there
is speculation that the state might buy some of the issue,
particularly given its potential broader financial significance
for the country.     
    Fibank needs to bolster its capital after a comprehensive
assessment of six Bulgarian lenders by the European Central Bank
(ECB) last year found it had a capital shortfall of 263 million
euros ($286 million).
    Finance Minister Vladislav Goranov has said the lender has
managed to cover about 70% of the estimated gap and was working
seriously to secure the remaining part. 
($1 = 1.8149 levs)

 (Reporting by Tsvetelia Tsolova; Editing by Steve Orlofsky,
Kirsten Donovan)
 ((tsvetelia.tsolova@thomsonreuters.com; +359-2-93-99-731;))