Bulgarian state takes part in Fibank capital increase (updated)

First Investment Bank AD

10/06/2020 18:08

(Adds details, official quotes)
    SOFIA, June 10 (Reuters) - Bulgaria has taken part in a
capital increase by First Investment Bank  5F4.BB  (Fibank),
which is raising money to cover a capital shortfall found by
European Central Bank stress tests last year.
    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
hopes to join both in July.
    Economy minister Emil Karanikolov said on Wednesday the
state had participated in the capital increase at an acceptable
level, but declined to say how many shares it would buy, making
clear it would not subscribe the whole issue. He said an
official statement would be published on Friday.     
    Fibank is selling 40 million new shares to raise 200 million
levs ($116.1 million) to help it to cover the capital
shortfall. urn:newsml:reuters.com:*:nL8N2CV5YF 
    Karanikolov said the coronavirus crisis had hit investors'
appetite and the state had to step in to ensure that Bulgaria
would meet all requirements to enter the two-year obligatory
precursor to the euro, the ERM-2 mechanism.
    "The state had to participate. Our main aim was for private
investment to get in. Simply, the state aiming to deliver on its
national strategy, had to make this buffer," Karanikolov told
private BTV television.
    "If we had said from day one that the state will
participate, we would not have achieved this effect,"
Karanikolov said. "And the effect is for Bulgaria to fulfil
everything necessary for an entry in the waiting room. This is
very important."
    All 110 million rights to subscribe the new shares were sold
on the Bulgarian Stock Exchange on Wednesday. The subscription
for the new shares, offered at a market premium of 5 levs per
share, will run until June 25 and trading is expected to start
in early August.
    Shares in Fibank rose 0.8% to 2.6 levs per share on
Wednesday.
    Stakes in Fibank owned by Bulgarian businessmen Tseko Minev
and Ivailo Mutafchiev, who each own 42.5%, will be diluted after
the issue, but they will remain majority shareholders.
    The remaining 15% is floated on the Sofia bourse.          
($1 = 1.7226 leva)

 (Reporting by Tsvetelia Tsolova; Editing by Jan Harvey and Jane
Merriman)
 ((tsvetelia.tsolova@thomsonreuters.com; +359-2-93-99-731;))