6 Investors to Bid for Bulgarian State Railways Freight Unit Six investors have shown interest in the privatization of the cargo unit of Bulgarian State Railways (BDZ) company, according to Emil Karanikolov, Executive Director of the Privatization and Post-Privatization Control Agency (PPCA). Speaking Monday for the Bulgarian National Radio, BNR, just hours after the deadline for purchasing documentation for the tender, Karanikolov informed the six investors were the Sofia-based consultancy Yurista EOOD, Georgieva, Todorov & Co Law Office, lawyer Valentin Tsenov Ivanov, Grigorov & Assoc. Law Office, lawyer Todor Ivanov Angelov and First Investment Bank, and the private railway freight carrier Bulgarian Railway Company (BRC), owned by Romania's largest private railway company, Grup Feroviar Roman (GFR). Except for BRC, all other bidders for the privatization of BDZ Freight Services are represented by consultancies and law offices. Karanikolov explained he had learned from his most recent conversations with a consultant that all investors were associations between foreign businessmen and "Bulgarian players." He stressed that there would be no privatization for just "any price." The PPCA CEO added the criteria for bidding were lowered to the very admissible extend. In mid-November, Bulgaria's Privatization Agency launched a second privatization procedure for BDZ's Freight Services, after the first one fell through. The second attempt to sell the cargo unit of BDZ will only include strategic and financial investors. The privatization of BDZ's profit making unit, Freight Services, is to secure money to cover huge debts of the company and help revive its other unit, Passenger Services.
Source: econ.bg (08.01.2013)

FIB joins the creditors of VMZ Sopot The Plovdiv Regional Court has allowed First Investment Bank (FIB) to join as second creditor to the claim for opening insolvency procedures against VMZ Sopot. The magistrates postponed the lawsuit from January 21 to February 18, announced the court’s press office. The size of FIB’s claim is not known yet. The legal action against VMZ Sopot is initiated by the joint-stock company Mehanichen Zavod (Mechanical Plant) Plant – Devin JSC, which has credited VMZ with over BGN 2 mln. VMZ’ liabilities to suppliers amount to around BGN 100 mln and these to the State to some BGN 50 mln. VMZ’ CEO Ivan Stoenchev has already announced that the closure of loss-making productions is part of the recovery programme for the enterprise, presented by the syndicates on Monday evening. According to the economic analysis of VMZ’ management, some 900 workers should be sacked, some productions have to be merged, unprofitable ones have to be closed and the total expenses of the company for supplies have to be reduced. The Minister of Economy, Energy and Tourism Delian Dobrev was presented with 11 different proposals for solving the problem at VMZ Sopot, said the town's Mayor Veselin Lichev, cited by Focus news agency. On Thursday, the trade unions and the management of VMZ Sopot will discuss the recovery programme, when the effective strike will stop and how many workers will be laid off. According to the syndicates, the number of sacked workers should not exceed 500, but the management of VMZ is of the opinion that this would be difficult because the liabilities of the plant amount to BGN 150 mln. On Wednesday, January 23, Parliament is expected to vote on the removal of the enterprise from the list of companies which are of strategic importance to the national economy, whose privatisation is carried out only according to a special strategy adopted by the National Assembly.
Source: Class (23.01.2013)

Bulgaria’s Harmonee 2012 invites bids for upgrade of smelter OTZK Sofia-based Harmonee 2012 said on Tuesday it has invited bids for the renovation and modernization of Bulgarian lead and zinc smelter OTZK. France’s Onet Technologies is one of the companies that have expressed interest in the tender, the company said in a statement. Companies from Canada and the U.S. are expected to visit the production site in the coming days. The goal of the investor is restoration and modernization the zinc production on a high-tech base and creation of new jobs in the region in the fastest possible way.Harmonee 2012 won the tender for the sale of 50% of indebted smelter OTZK in September, offering 8.6 million levs.
Source: money.bg (23.01.2013)

The Commission for Protection of Competition (CPC) allowed UBB to acquire Postbank, the Capital Daily writes. The deal is a result from the merger of the two banks’ parent institutions in Greece – the National Bank of Greece (NBG) and Eurobank EFG. The anti-monopoly commission announced that following an assessment and analysis of the respective market and the financial services offered by the two crediting institutions - banking, insurance, leasing, factoring, assets management etc., “the planned concentration will not lead to a strengthening of their dominating position on the market that would considerably limit or hamper efficient competition on the markets analysed.” In order to make its assessment the CPC requested standpoints and information from the Bulgarian National Bank (BNB), the Financial Supervision Commission (FSC), the Association of Banks in Bulgaria (ABB), the Bulgarian Association for Leasing (BAL) and the two banks’ main competitors on the market – UniCredit Bulbank, DSK Bank, Raiffeisenbank, Fibank, SG Expressbank, Corporate Commercial Bank, Piraeus Bank, MKB Unionbank, Allianz Bank, Central Cooperative Bank, as well as some of the two merging financial institutions’ main clients. The CPC established that the merged financial institutions will not have a market share exceeding 25% in any of the segments on the banking market. The merged financial institutions will be second on the market in terms of assets with a 15.3% share in retail banking, 23.2% in housing and consumer loans, 14.1% in corporate crediting and 16.6% in household and corporate deposits.
Source: Capital (28.01.2013)

Four candidates have submitted papers to verify their compliance with the requirements in the tender for the freight transport unit of Bulgaria’s state-owned railway holding company BDZ, the country’s privatisation agency said on Monday. Documents were filed by Romania’s Grup Feroviar Roman, Bulgaria's First Investment Bank [BUL:5F4], local company Bulgarian Cargo Express and Austria's Donau-Finanz Transport und Beteiligung, the agency said in a statement. The agency should issue the relevant compliance certificates by February 18. The certified candidates will then be eligible to file binding bids by March 12. A total of nine candidate buyers bought documents to participate in the tender for BDZ Tovarni Prevozi. A total of 2,325,087 shares of the company, equivalent to 100% of its capital, have been put up for sale.
Source: Capital (29.01.2013)

Bevt AD is selling at an auction by a private bailiff the ex-radio factory in the Pavlikeni village of Daskot to the amount of BGN 107 806. In accordance with the announcement the factory for sale is actually the ex Bitova technika AD in Veliko Turnovo. The deadline for the public offerring is running from January 25, 2013. The property is mortgaged before the First investment bank for BGN 200 000. The whole building has an area of nearly 6 acres, of which 1.5 acres are built-up. The initial price is set at BGN 107 806.
Source: Borba - Veliko Tarnovo (29.01.2013)

Creditors demand that BDZ Holding declares bankruptcy Five banks demanded that BDZ Holding declares bankruptcy, Trud daily informs. They filed the demands with the London Arbitrary Court. The reason is that the Bulgarian railway carrier has an outstanding loan worth EUR 120 million. The outstanding loan was negotiated with a banking syndicate, including four foreign banks and one Bulgarian bank. These are French BNP Paribas and Societe Generale, Austrian Kreditanstalt, and Belgian Dexia. Bulgarian First Investment Bank (Fibank) granted 15% of the loan. Fibank applied to take part in a privatization procedure of BDZ Freight Services, which is expected to be completed in March 2013. Experts in the railway transport sector speculated on the bank’s motives to take part in the bid. The state will hardly earn a huge profit from the sale of BDZ Freight Services, railway sector experts comment. Four companies will take part in the bid: Fibank, Bulgarian Cargo Express, and Donau-Finanz.
Source: Trud (04.02.2013)

Five banks have filed a claim with the London Arbitration Court to declare the Bulgarian State Railways company, BDZ Holding, bankrupt. The information was reported Monday by the Bulgarian Trud (Labor) daily, citing own insider sources. The reason behind the claim is the staggering debt accumulated by BDZ, more precisely the so-called second bond for EUR 120 M. The credit was granted to the previous Cabinet of the Three Way Coalition and installments have not been paid in many months. The news has been confirmed for Trud by senior officials from the Transport Ministry and personally by the Chairman of the BDZ Board of Directors, Vladimir Vladimirov. The defaulted loan has been contracted with the French banks BNP Paribas and Societe Generale, the Austrian Creditanstalt and the Belgiun Dexia. About 15% of the loan has been granted by the Bulgarian First Investment Bank (FIB). Recently, to the surprise of railway experts, FIB purchased documentation for the tender to privatize the cargo unit of BDZ. The privatization procedure is expected to conclude by March, 2013. In addition to FIB, the other three final bidders that emerged are: the largest, private Romanian railway operator Grup Feroviar Roman, which is the owner of BRC, Kiril Domuschiev with the recently founded company Bulgarian Cargo Express and the Austrian Donau Finanz. The bankruptcy claim comes as a shock to the Holding since 1 500 cargo train cars are used as collateral in the loan, and they are in the best condition. All remaining cars are obsolete and need serious repairs. "Banks are fed up with these gimmicks. How can one expect something different when the loan has not been serviced in 3 years, and no one even picks up the phone when they call to ask what is happening with their money," a source from the Transport Ministry, quoted by Trud has said. According to Vladimirov, the claim does not aim at declaring the Holding bankrupt, but rather to appease the banks that they have some guarantees in getting their money back. He explains the bankruptcy claim must be examined by a Bulgarian Court, which is backed by the legal counsel of the Transport Ministry and of BDZ. The delayed payments for the loan in the last 3 years already amount to EUR 32 M. BDZ is negotiating with creditors now in an attempt to be granted another deferral. Meanwhile, it emerged last Friday that the main account of BDZ has been garnished on a request from the German bank KfW. According to estimates, BDZ currently owes KfW some EUR 41 M for Siemens Desiro electric trains it bought in 2005, a debt it does not manage to service as per the arranged schedule. If BDZ is to be declared bankrupt, the money would not be enough to cover the huge debt, estimated in the vicinity of a total of over BGN 720 M. In mid-November 2012, Bulgaria's Privatization Agency launched a second privatization procedure for BDZ's Freight Services, after the first one fell through. The second attempt to sell the cargo unit of BDZ will only include strategic and financial investors. The privatization of BDZ's profit making unit, Freight Services, is to secure money to cover huge debts of the company and help revive its other unit, Passenger Services. However, experts from the railway sector have already said the State should not count on receiving much as the revenues of the cargo unit dropped by 30% in 2012, while the debt keeps climbing up.
Source: Trud (05.02.2013)

More than a year after Lead and Zinc Complex in Kardzhali stopped working and several months after its production capacities were sold, cases for over BGN 22 million has been filed against the company. The sum consists of administrative and arbitration proceedings for larger charges (more than 10% of equity), and claims of employees for unpaid wages. Because of arrears, two creditors wanted opening of insolvency proceedings. First investment bank has the largest claims towards the end of September. The bank filed two claims to the amount of a total of BGN 15.7 million. Other larger claims, for which there is pending litigation, are of leasing companies, documents show. Scania is to receive over BGN 1 million, while Interlease has a claim to nearly BGN 2.6 million. Currently production activity is completely stopped.
Source: Capital (05.02.2013)

Bulgarian lead/zinc smelter OTZK 9-mo non-cons net loss widens Bulgarian lead and zinc smelter OTZK said on Monday its non-consolidated net loss widened to 12.25 million levs ($8.55 million/6.26 million euro) in the first nine months of 2012 from 7.03 million levs in the same period a year earlier. The smelter’s non-consolidated sales revenue dropped to 2.84 million levs through September from 70.66 million levs in the same period of 2011, OTZK said in a statement filed with the Bulgarian Stock Exchange. Exports accounted for 61.16% of the total revenue. OTZK’s nine-month operating loss amounted to 5.36 million levs, up from some 2.0 million levs a year ago. The amount of lead produced in the first nine months of last year dropped to 84 tonnes from 5,948 tonnes in the same period last year, while zinc output decreased to 402 tonnes from the previous 13,330 tonnes. The negative trend was due to repair works carried out at the production capacities, workers' strike, which ended at the end of the second quarter and finally to production termination as a result of asset sales to cover the smelter liabilities, the statement added. Last month, Sofia-based Harmonee 2012, which won the tender for the sale of 50% of indebted smelter OTZK in September, invited bids for the renovation and modernisation of the smelter. France’s Onet Technologies is one of the companies that have expressed interest, while companies from Canada and the U.S. are expected to visit the production site as well.
Source: Capital (05.02.2013)

BDZ Freight Business Privatization Greenlighted “The process of privatization of the freight business of BDZ will not be blocked,” Transport Minister Ivaylo Moskovski said. “I have just come back from Germany, where I had talks with representatives of KfW Bank that provided the loan for the purchase of fifty Siemens trains by the Bulgarian Railway Company BDZ. We are in negotiations with the other creditors that have filed claims against BDZ Holding, the owner of BDZ Freight Operations,” he said. We will do everything possible to facilitate the privatization process so that it is completed in the shortest possible term,” Moskovski added. In fact, the First Investment Bank is the only creditor of BDZ Holding that has not filed a defaulted debt claim against the company, yet. Some of the creditors have even threatened to block the company’s privatization.
Source: Standart (18.02.2013)

Bulgaria's Privatisation Agency said on Monday it had admitted the four candidates for the purchase of the freight unit of the state railways holding company BDZ to the next stages of the tender. The four companies that had submitted documents seeking to verify their compliance with the tender requirements have all met the pre-qualification criteria and can proceed to the next stages of the privatisation procedure, the government's asset-selling agency said in a statement. The four candidates to acquire 100% of the freight unit of BDZ are: Romania’s Grup Feroviar Roman, Sofia-based Bulgarian Cargo Express and Balkan Financial Services, and Austria's Donau-Finanz Transport und Beteiligung. The privatisation agency said it has issued the relevant compliance certificates to the four companies, which now can conduct legal and financial analyses of the company. The candidates face the March 12 deadline for filing binding bids. The government aims to get at least 200 million levs ($133.5 million/102.3 million euro) from the sale of the freight unit of BDZ, Bulgarian transport minister Ivailo Moskovski said last month.
Source: Capital (19.02.2013)

The Plovdiv District Court will hold a closed-doors sitting Monday on the bankruptcy trial for Bulgaria's ailing state-owned military plant VMZ Sopot. The bankruptcy proceedings were commenced by Mechanical Plant-Devin AD over a debt of BGN 2.5 M accumulated in the period 2010 – 2012 for ammunition parts, the Bulgarian National Television (BNT) reminds. According to the lawyer of VMZ Sopot, however, Mechanical Plant-Devin AD had no license to manufacture the specialized items. During the previous closed-doors sitting on January 21, the Plovdiv-based court allowed the inclusion of a second creditor, First Investment Bank AD, and scheduled the next hearing for February 18 to allow the defendant and the court authorities to gather evidence. On February 7, Bulgaria's Parliament took VMZ Sopot off the list of companies banned from privatization, thereby facilitating the sale of the military plant by the Privatization and Post-Privatization Control Agency (PPCA). On January 14, the privatization of the heavily indebted arms manufacturer was terminated after the sole bidder, Sofia-based EMKO EOOD, failed to submit a mandatory deposit for participating in the procedure. The state-owned military plant has a total headcount of over 3000, with 600 workers expected to be dismissed by March 1, and debts exceeding BGN 150 M. The privatization deal for the military plant is to be wrapped in three months
Source: Capital (19.02.2013)

The resignation of the government affected negatively the stock market. The main index SOFIX fell 2.69% yesterday to 382.7 points. The greatest decline was of Chimimport’s shares (14% to BGN 1.22), CCB (by 11% to BGN 0.782) of Bulgartabac (by 6.49% to BGN 93.5). Around noon a strong decrease of about 9% was recorded for shares of First Investment Bank. Stara Planina Hold rose (by 2.81% to BGN 2.699), M+S Hydraulic (by 2.16% to BGN 7), Kaolin (by 0.56% to BGN 3.62) and Eurohold Bulgaria (by 0.33% to BGN 0.925). The decline in the share prices of these companies is not random and can be explained by the conservative attitude of investors towards them because of the lack of clarity about possible scenarios following the resignation of the government, experts believe. Stock Exchange always overexposed similar political news and the effect on the economy is not commensurate with the effect on stock trading.
Source: Sega (21.02.2013)

The choice of a buyer for MKB Unionbank has entered its final round. It will be announced this week which of the candidates will be allowed to begin negotiations with the seller – German financial group Bayern LB. Two Bulgarian banks are the main competitors for the financial institution – Fibank and DSK Bank. Sources familiar with the matter say their binding offers are certain to be accepted. Central Cooperative Bank (CCB) was also expected to make an offer, but one never followed, in spite of the due diligence conducted on MKB Unionbank. The BNB concluded that whichever of the two financial institutions acquires MKB, it will remain second in terms of assets volume.
Source: Standart (11.03.2013)

Zahariev’s company withdrew complaint towards Lead and Zinc Complex One of Valntin Zahariev’s companies withdrew its complaint towards Lead and Zinc Complex-Kardzhali. The ex-employees in the factory though are not to receive their unpaid salaries. The reason is that three more companies have claims towards selling the factory. The company that gave up its claim is under the name of Steel Commodities. "We ask the other companies - First Investment Bank,l BNP Paribas and the other company of Valentin Zahariev - Scania, to also withdraw complaints against distribution of money," said Stefan Atanasov, representing metalworkers. Only then will they be able to receive wages that they are owed for months. "We hope this to happen, everyone has to take an average of BGN 4 to 5 thousand, but until it becomes a fact, we are ready to protest," Atanasov said. He stressed that the decision for workers to meet again in the center of Kardzhali of March 14 remains.
Source: Standart (11.03.2013)

FIB cleared the way for payment of salaries at OCK First Investment Bank has withdrawn its application for the allocation of funds from forced sales of property belonging to the Lead and Zinc Complex JSC - Kurdzhali. The appeal used to delay the payment of metalworkers’ salaries so they had announced that they would build a tent camp and begin a hunger strike. After being briefed on the operation of the bank, employees decided to suspend the protest. Their leader Stefan Atanasov said that workers remain in strike mode and would take radical action if they do not get their money. Metallurgists insist on meeting with new investor in the plant in order to get information on whether production will be restored and when there are going to be appointments.
Source: Dnevnik (15.03.2013)

Only Fibank wants MKB Unionbank First Investment Bank (Fibank) made an offer to buy MKB Unionbank, Capital Daily reports. The other prospective buyer is Hungarian OTP Bank, owner of DSK Bank in Bulgaria. However, it did not submit an offer. Fibank probably has offered to buy Fibank at a price of about half the equity of MKB Unionbank. In end-2012 the equity of the bank stood at BGN 207.5 million. Therefore, the proposed purchase price is about BGN 100 million. MKB Bank in Hungary did not answer questions of Capital Daily related to the purchase. Fibank did not comment either. OTP Bank did not comment the deal either. At this stage it is not certain whether there will be negotiations and a deal, because since the very beginning of MKB Unionbank’s sale in 2012, its end owner Bayern LB (which owns Hungarian MKB Bank) explained it would not sell the bank at any cost. The other two prospective buyers – Central Cooperative Bank and Union Group – have not submitted bids either. Experts say that the purchase price of the bank amounted to about BGN 100 million. However, it had to include also the short-term resource of MKB Unionbank worth BGN 345 million. In case of a sale, the parent bank will receive this amount, while the buyer will have to provide liquidity buffers to replace the withdrawn ones. The sale of 49.99% of the capital of the Bulgarian-American Credit Bank (BACB) in 2011 resembles this one. BACB’s owner Tsvetelina Borislavova paid EUR 100,000 and provided a credit line of EUR 35 million. Thus, BACB repaid a bond issue and increased its capital by EUR 50 million. At present, Fibank is traded at about 40% of the value of its equity on the Bulgarian Stock Exchange. Fibank, whose main shareholders are Tseko Minev and Ivaylo Mutafchiev, is Bulgaria’s third bank in terms of assets. If it acquires MKB Unionbank it may replace DSK Bank and take the second place.
Source: Capital (18.03.2013)

Bulgarian First Investment Bank, known to be controlled by controversial businessman Tseko Minev, is the sole bidder for the sale of Bulgarian MKB Unionbank. First Investment Bank has filed a binding bid worth some BGN 100 M, about half of MKB Unionbank's own capital, according to information by Bulgarian newspaper Capital Daily. Hungarian OTP Bank, thought to be another likely buyer, has not filed an offer yet, writes the newspaper. MKB Unionbank is held by German Bayern LB via Hungarian MKB Bank. Bayern LB has stated in the past that it is in no hurry to sell Unionbank, meaning it would be looking for a profitable price. Tseko Minev, president of the Bulgarian Ski Federation, has become notorious for standing behind a number of tourist development projects requiring bypassing or relaxing environmental regulation. Under Minev's rule, the Bulgarian Ski Federation has been confirmed by monitoring agencies to have sourced state subsidies to companies controlled by Minev. The businessman is known to control two of Bulgaria's major ski operators - Yulen, working in Bansko, and Vitosha Ski, near capital Sofia. First Investment Bank is a large creditor to a number of major Bulgarian industrial enterprises that have suffered financial hardship. As an example, end of 2012 the bank bought substantial assets of a debtor - the largest Bulgarian non-ferrous metal works, OTzK Kardzhali, and has closed down production. The bank is also a creditor to Bulgaria's largest state weapons factory, VMZ Sopot, which experienced severe financial hardship in early 2013.
Source: Capital (19.03.2013)

Some 4000 workers of Bulgaria's VMZ Sopot military plant, who have had their salaries delayed by a month, are expected to get payment after the arms manufacturer withdraws a loan from Corporate Commercial Bank. The announcement about the loan was made by Asen Vasilev, caretaker Minister of Economy, Energy and Tourism, during a press conference on Friday. "As far as I know, intense activity in connection with securing a loan from KTB is currently underway. I cannot say if a draft agreement for the loan has already been achieved," Vasliev stated, as cited by investor.bg. He did not specify the amount of the loan nor how the bank had been selected. Bulgaria's caretaker Economy and Energy Minister admitted that the situation at VMZ Sopot was particularly worrying, adding that meetings had been held with representatives of the trade unions at the plant. Dimitar Atanasov, representative of the Podkrepa Labor Confederation at the Sopot-based arms manufacturer told Sega daily that there were no tensions at the plant because the payment had only been delayed by a month. He suggested that the workers would most probably get their salaries by next Thursday but could not specify the amount of the overdue sum. At the beginning of 2013, VMZ workers started protests after their salaries had been delayed for months on end. In end-January, following the intervention of then-Prime Minister Boyko Borisov, VMZ Sopot was transferred BGN 4 M to pay overdue salaries. Borisov did not go into detail about the source of the rescue money transfer, saying that an international contractor of the state-owned arms manufacturer had made an advance payment. VMZ Sopot has run up debts of over BGN 140 M to its suppliers and Bulgaria's National Electric Company (NEK). Bankruptcy proceedings against VMZ Sopot were commenced by Mechanical Plant-Devin AD over a debt of BGN 2.5 M accumulated in the period 2010 – 2012 for ammunition parts. On February 7, Bulgaria's Parliament took VMZ Sopot off the list of companies banned from privatization, thereby facilitating the sale of the military plant by the Privatization and Post-Privatization Control Agency (PPCA). On January 14, the privatization of the heavily indebted arms manufacturer was terminated after the sole bidder, Sofia-based EMKO EOOD, failed to submit a mandatory deposit for participating in the procedure.
Source: Capital (25.03.2013)

For a second time a private bailiff proposes at an auction Plovdiv-based machine building company Fin tech mach. After the failed first attempt in February now land and buildings are announced for sale for BGN 5.5 million, equal to 80% of the initial price. This is the last manufacturing company of the ex-owner of Kremikovtsi Valentin Zahariev, who last year parted with mining company"Gorubso - Madan" and lead-zinc complex in Kardjali, while his pipe plant "Inter pipe" went into bankruptcy. Fin tech mach serviced predominantly the other companies of Zahariev, so it is expected that the auction will take place without great interest. Till the 24th of April candidates may hand out offers for the property, which includes nearly 92 thousand square meters plot, as well as 26 industrial and administrative buildings and warehouses. Besides this a private bailiff announced the sale of nine machines, assessed to nearly BGN 110 thousand. The plot is mortaged by loans of two banks- Post bank with two loans of EUR 5 million and EUR 2 million respectively, together with a mortgage from Credit Suisse to the amount of EUR 13.8 million.
Source: Capital (26.03.2013)

One more bank to grant business loans at twice lower interest rates One more bank joined the JEREMIE scheme (Joint European Resources for Micro to Medium Enterprises) for granting loans at twice lower interest rates. Since mid-April UniCredit Bulbank will start granting its loans at a twice lower interest rate compared to standard interest rate levels. Thus, banks participating in the JEREMIE scheme become five, including Procredit Bank, Societe Generale Expressbank, First Investment Bank, and Allianz Bank. UniCredit has agreed on having a portfolio totaling EUR 50 million, of which EUR 25 million will be provided by the fund and EUR 25 million will be provided by the bank itself.
Source: Capital (05.04.2013)

Another Kremikovtzi deal The ex-metallurgical company Kremikovtzi is said to change its owner again. The factory does not operate for years, while the very company was announced bankrupt. Its land and buildings were bought; the biggest part of the machinery was scrapped by the current owner of the assets. Now a new change of ownership is imminent. A company to the name of Kris Mit announced its intention to acquire 100% of the capital of Kremikovtzi owners-Eltrade Company, Nadin Metals Trade and Valpet Consult. The price was not disclosed, but according to independent sources it will be between EUR 180 and 200 million. This is more than the sum, paid by Eltrade for the assets two year ago, although most of them were sold as scrap metal, an there is no production at all. The candidate is also strange - the company has a miniscule turnover of BGN 7 thousand in 2011 and its majority owner has criminal record. The new owner is supposed to be connected with the First Investment Bank, which funded the first purchase of the assets.
Source: Capital (24.04.2013)

Businessman Vasil Bozhkov sold his road-construction companies. "Mr. Bozhkov and his companies have absolutely no involvement in PST Holding". PST Holding constructs sections of Trakia and Maritsa highways. "Mr. Vasil Bozhkov is an investor in companies from various industries, not only in Bulgaria but also in many other countries, and his investments in infrastructure and cosntruction continue. Regarding any questions about the ownership of PST Holding, Moststroy and Holding Roads we reserve the right not to comment on trade relations at the time," says a press release. According to mediapool.bg, the buyers of the road business are offshore companies, backed by one of the owners of First Investment Bank - Tzeko Minev.
Source: Standart (26.04.2013)

The Sofia Court House announced that the court terminated one of the proofs of claim in bankruptcy against the Vazov Machine Building Factory (VMZ - Sopot). The Plovdiv District Court requested from the creditor – First Investment Bank (Fibank), to specify the volume of its financial claim three times, but the bank never did. The bank has lodged an appeal at the Appellate Court. If the appeal of the First Investment Bank is dismissed by the Court of Appeal, the case will continue only on the request of the creditor "Mechanical Plant - Devin" AD.
Source: Duma (14.05.2013)

The Corporate Commercial Bank, the Central Cooperative Bank, Investbank, UBB, UniCredit Bulbank, Raiffeisenbank are the financial institutions managing funds of state companies, 24 Chasa daily reveals. Standart daily specifies that the number of these banks is 11 and adds the names of Postbank, First Investment Bank, D Commercial Bank, CIBank and Bulgarian-American Credit Bank. Some 41 of state companies have deposited too much of their money into only one bank, research by Bulgarian ministries revealed. Some 59.44% of money of NEC, 96% of money of Bulgartransgaz, 88.20% of BEH and 90.85% of deposits of Bulgargaz are managed by the Corporate Commercial Bank. Five companies related to the Ministry of Economy have large deposits in the Central Cooperative Bank. 42.54% of the money of Kozloduy NPP is deposited in Investbank. Money of BDZ Passenger Services is managed by UBB and Eurobank, money of BDZ Freight Railway Services is managed by the Corporate Commercial Bank, 61% of the money of Bulgarian Posts is managed by UniCredit Bulbank, while 91.95% of the money of Bulgarian Port Infrastructure Company is managed by the Central Corporate Bank.
Source: Standart (23.05.2013)

European Bank for Reconstruction and Development (EBRD) has sold its remaining 3% of the capital of MKB Unionbank to its majority owner – Hungaria-based MKB Bank. Transaction occurred on May 23, 2013, thereby Hungarians already own 100% of the Bulgarian bank. EBRD was a shareholder in Unionbank for nearly eleven years. It entered it in the fall of 2002, purchasing 15% of the capital. Back then MKB Unionbank was entirely Bulgarian property. In 2006 the EBRD remained with 6% share in the capital of the bank, after selling the rest to the Hungarian MKB Bank, which acquired 60% of Unionbank (the name then). Hungarian bank in turn is owned by the German BayernLB. Last year, when the sale of MKB Unionbank which is still underway started, the EBRD sold another 3% to the Hungarians. EBRD's strategy is to enter as owner of a share of a company’s capital (including banks) for a period of time to support its development. After the end of the investment period it backs down. EBRD was a shareholder in UBB, BNP Paribas Sofia Branch, FIB, ProCredit Bank.
Source: Capital (27.05.2013)

An off-shore company, registered on the Virgin Isles has bought majority share of PST holding’s shares. A month ago, information published in the media suggested that one of First investment bank’s owners Tseko Minev has acquired road construction business of Vasil Bojkov via an off-shore company. Transfer of shares was approved of on the annual general meeting of shareholders that took place on the 15th of April. At the meeting 65 % of PST holding became ownership of the registered on the British Virgin Isles company Galiano Worldwide limited. At the same meeting new members of the company’s Board of directors were appointed. These are as follows: Ivan Sharlandjiev, Petko Hitrov and Ivan Ivanov.
Source: Darik Radio (27.05.2013)

FIB plans to issue mortgage bonds First Investment Bank (FIB) plans to issue mortgage bonds. This became clear from the published decisions, made at the general meeting of shareholders held on May 21, 2013. The face value of bonds can be up to BGN 100 million, while their maturity is 10 years from the date of issue. Changes in the Bank's Statute that were made, allow for the issuance of mortgage bonds, as the Governing Council will be able to decide on this for five years from the date of registration of the amendment of the statute. That is, in other words for a period of five years.
Source: Capital (31.05.2013)

Global communication net complained that the company is subjected to a hostile takeover by First Investment Bank (FIB). The Internet provider has a loan to the amount of EUR 1.8 million to the bank and due to a delay of EUR 150 thousand the bank seized its business. Global communication net (GCN) is one of the comparably big wholesale Internet serviceproviders in Bulgaria. The company delivers nearly one third of Internet connectivity in Bulgaria. Among its customers are Blizoo, Bulsatcom, Mobiltel, hundreds of smaller Internet operators. Majority owner of the company is Seguin holdings, a company registered in the American state of Delaware. Actually GCN is the ex-mother company of Cabletel. In 2011 the company borrowed from FIB a sum to the the amount of EUR 1.8 million with repayment term of five years. The company pledged all of its assets at the time, which included machinery, equipment and facilities (Network for Electronic Services). GCN’s management claims that the whole loans are repaid, but the news is that all assets of the company are sold. The bank organized a tender for the sale of pledged assets of GCN, at an auction that took place on May 27. Turnaround Management is the buyer at a price of BGN 15.2 million. It turns out that the firm is 100% owned by the bank and even is registered at the same address with a capital of BGN 2.
Source: Capital (10.06.2013)

Bulgaria’s BT Development invests 20.5 mln euro in expansion of beach hotel Bulgaria’s hotel and resort developer BT Development Service has invested BGN 40 million in the renovation and expansion of Black Sea complex Grand Hotel and Casino International. The complex was renamed to International Hotel Casino & Tower Suites and its official opening is scheduled for June 22. The premium hotel, located in the Golden Sands resort, is now a member of sales and marketing alliance Great Hotels of the World. It is part of hotel chain BT Collection, managed by BT Development - one of the companies that inherited Soviet-era tour agency and hotel operator Balkantourist. Hotel’s guests may dispose with the following services: the biggest casino in Bulgaria with an area of 1500 square meters, the biggest conference center in Bulgaria, situated in a hotel complex, Spa center, 300 parking lots within the very center of the resort, thematic restaurants, shopping center and an attic terrace with an area of 3 thousand square meters and an infinity pool. The renovation and expansion, funded with a loan from First Investment Bank, was carried out by Bulgarian construction company Planex. After the renovation, International Hotel Casino & Tower Suites has 325 rooms and apartments and houses the biggest hotel conference center and casino in Bulgaria.
Source: Dnevnik (11.06.2013)

FIB's health fund granted a new certificate Fund for private health insurance under the name of Fi Health, where First investment bank is a shareholder was granted with a new certificate for activity, which authorizes the company to continue operation after August 2013. Permission from Financial Supervision Commission is due to obligatory re-certification of all health funds, which was adopted several years before under EU’s requirement. New rules are entering into force from the start of August, as they have already made changes of the market. Fi Health’s certificate is a standard one- it permits issuing of promissory notes Accident and Illness, against which the company pays fixed sums or compensations. Major shareholders in the company are as follows: FIB with a stake of 59.1%, Prime Health-39.2%, as well as natural entities.
Source: Capital (18.06.2013)

Assets of banks in Bulgaria are nearly 82.9 billion levs At the end of May this year, total assets amounted to some 82.9 billion levs, says today's data of the Bulgarian National Bank (BNB), which published statistics on banking groups and banks. The change within a month is small. At the end of April 2013 total assets amounted to 82.5 billion levs. May 31, deposits of individuals and households in our banks were 36.79 billion levs,. According to preliminary data, the amount of deposits of households and non-profit institutions serving households (NPISHs) is 35.3 billion levs. However, the total amount of borrowed funds of credit institutions in the country was 71.1 billion levs at the end of May this year. BNB data have ranked the largest banks in terms of assets at the end of May. Grouping does not contain within itself elements of the rating and should not be interpreted as an assessment of their financial situation, explained by the central bank. Position of the banks in the group depends on the size of their assets and changes at the end of each reporting period. Assets of the 5 largest credit institutions in the country at the end of May totaled 41.2 billion lev amount is increased by about 500 million levs, at the end of April, the assets of the top 5 largest banks in the country amounted to 40.7 billion levs. Here are the 5 largest Bulgarian banks at the end of May: 1. UniCredit Bulbank; 2. DSK Bank; 3. First Investment Bank (FIB); 4. United Bulgarian Bank (UBB); 5. Corporate Commercial Bank (CCB).
Source: econ.bg (01.07.2013)

No room for further mortgage rate cuts It seems as though mortgage interest rates have bottomed out and there’s no room for further decreases, Capital Daily reads. At the moment, interest rates on housing loans average 6.2%-6.7% on annual basis. Despite the fact that banks never stopped launching new promotions, interest rates on mortgage loans have been hovering around the abovementioned percentages for over six months now. A number of local lenders offer housing loans at these levels – DSK Bank (6.7%), Fibank (6.5%), UBB (6.2%), Societe Generale Expressbank (6.5%), Cibank (5.86%-6.10%), MKB Unionbank (6.6%), Alpha Bank (6.4%), Credit Agricole (5.85%). Two banks offer cheaper mortgages – UniCredit Bulbank (4.5% for the first year and 6.5% fluctuating interest for the remainder) and Postbank (4.6% for the opening year and 6.6% for the remaining period). Despite the relatively low housing interest rates, the real estate market and mortgage lending remain sluggish.
Source: Capital (02.07.2013)

UniCredit Bulbank is "Bank of 2012" UniCredit Bulbank was "Bank of 2012" in the rankings of the Bank of the Year Association. The prize is awarded for the 16th time, and the special guest of the event was a Polish economist Prof. Leszek Balcerowicz. A new ranking for the category "Banking Brand of the Year" won DSK bank. In the other categories the most awards took First Investment Bank. Bank's "Bank of the client" where rankings make consumers of banking services over the Internet Bank is the first increase in market share and takes the "Prize of the mystery shopper". Bank noted most dynamic development for the third consecutive year, Corporate Commercial Bank, and the most effective is CIBANK. Award for a foreign bank branch goes to Citibank NA - Sofia Branch.
Source: Darik Radio (03.07.2013)

Yet another sale of Bulgaria’s Kremikovtzi heading towards failure The Commission for Protection of Competition (CPC) granted permission to the Bulgarian company Kris Mit to acquire three of the companies holding the assets of the Kremikovtzi metalworking company. However, sources familiar with the matter said finalising the deal is unlikely. Rumour has it that the potential buyer finds the political configuration following the elections unsuitable and has withdrawn from the deal. Representatives of the metallurgy sector say the company is connected to First Investment Bank (Fibank) that financed the first deal with the assets of the metalworking company. In the spring of 2011 Eltrade Company, Nadin Metals and Valpet Consult acquired the assets of Kremikovtzi against EUR 161.6 million with bridge financing from Fibank. The newspaper reports that Kris Mit is likely to put some of Kremikovtzi’s production capacities back into operation.
Source: Standart (03.07.2013)

Sixth bank to issue loans at low interest rates A sixth bank will issue loans to SMEs at low interest rates. Raiffeisenbank joined the second programme of the initiative JEREMIE of the European Investment Fund (EIF). The bank signed an agreement with the fund according to which it will issue loans to SMEs for at least EUR 20 million. The bank will secure half of the financing while the fund – the other half. Raiffeisen will issue the loans at more than 50% lower interest rates compared to its standard SME loans. The bank will issue investment and circulating capital loans, revolving credits and overdrafts. According to Evelina Miltenova, Executive Director of Raiffeisenbank, the crediting institution issues between BGN 40 – 50 million monthly for the financing of SMEs. Following the signing of the agreement the budget of the second part of JEREMIE becomes a total of EUR 330 million for loans at low interest rates. EIF provides BGN 165 million, while the six banks that have joined the initiative so far (ProCredit Bank, First Investment Bank, UniCredit Bulbank, Allianz Bank, SG Expressbank and Raiffeisen) undertake a commitment to double the resource. Under the scheme interest rates stand at 3 – 7%. The first JEREMIE programme started in the fall of 2011 – a guarantee scheme under which banks – partners (United Bulgarian Bank, ProCredit Bank, Raiffeisenbank, UniCredit Bulbank and CIBank) have to issue EUR 300 million in loans to SMEs at preferential interest rates. For the past 12 months 66% of the allocated budget has been absorbed.
Source: Capital (12.07.2013)

All bosses in "Doverie" resigned The management of the Pension Insurance Company "Doverie" (Trust) have resigned to express their disagreement with the procedure for the sale of the company. This said to the executive director Daniela Petkova. Executives in a company resorted to this drastic measure, because they believe that the transaction is opaque. Petkova said that in fact the deal has not yet started, but keep conversations. "We're still not initiated proceedings to sell, no submissions by the relevant regulatory and government authorities to take a decision. Do not know if there is a signed contract," she said. "Obviously there were no negotiations. Obviously there preferred orientation for their buyer notified to FSC," said the boss. Petkova said that all would remain in office until they accepted their resignations. She calmed customers of the company for the money in their personal accounts.
Source: expert.bg (15.07.2013)

Sopot mysteries The Capital Daily addressed an inquiry to the Economy Ministry on the spending of the BGN 27.5 million poured into the Vazov Machine Building Factory (VMZ - Sopot) and even though the response took an entire week it contained only a single specific statement on the spending of BGN 20 million on the repayment of accumulated debts and the remaining BGN 7.5 million on delayed salaries and circulating capital needs. The ministry claimed further details are confidential. In order to provide the funds to VMZ – Sopot the government raised the capital of the State Consolidation Company that receives income from privatisation deals. This is why taxpayers are entitled to transparency on the spending of the funds. The scarce information announced by ministries some time ago shows VMZ – Sopot has private creditors - Corporate Commercial Bank (CCB) and First Investment Bank (Fibank). The latter filed an insolvency claim against the factory some time ago. VMZ – Sopot has not published its financial reports for years, even though as a state-owned company it is obliged to do so every three months.
Source: Capital (16.07.2013)

First investment bank AD (Fibank) signed an agreement with the Hungarian MKB bank for acquisition of 100% of MKB Unionbank’s shares. The acquisition will be done after necessary aproval of responsible authorities is granted. Fibank is a dynamically working institution which is the third in volume of assets in Bulgaria with a 8.4% market share. MKB Unionbank takes the 15th position in the banking system with assets to the amount of BGN 1.5 billion. After the takeover Fibank’s assets will reach over BGN 8.5 billion.
Source: profit.bg (15.08.2013)

The price at which First Investment Bank (FIB) bought MKB Unionbank was not announced, although the buyer is a public company whose shares are traded on the BSE. It can be traced as the first financial statements of the vault for the quarter are reported, bank accountants explain. According to reports, however, the deal includes an amount of BGN 170 million, which is financing of the Bulgarian treasury by the seller - Bavarian Bayern LB. "This largely explains the decisions that the General Meeting of FIB took in May 2013. It empowered the Board of Directors with the approval of the Supervisory Board to issue bonds amounting to BGN 100 million. And by entering into debt FIB will assume the remaining internal and external funding, which has used by MKB Unionbank.
Source: Standart (19.08.2013)

Bulgarian banking network is shrinking In line with the European trend, Bulgarian banks have reduced their branches and staff since the beginning of the crisis. For the past four years the network of the biggest and most active banks in this country has shrunk 8.24% and staff has fallen 4.41%, a survey shows. The calculations are based on public data of half of the 24 registered institutions. The overall decrease in the number of branches and staff is a logical consequence of banks' shrunken business, bankers say. That is due to the slow-down in business activity and limited household consumption. Another factor in the process is the introduction of alternative banking forms, i.e. online and mobile banking. There are some exceptions to the rule, though. Four banks have expanded their branch network: Corporate Commercial Bank (43.59%), Societe Generale Expresbank (4.93%), DSK Bank (0.26%) and Central Cooperative Bank (0.38%). The number of employees has grown in First Investment Bank (6.32%), Societe Generale Expressbank (10.68%), Corporate Commercial Bank (42.09%) and Central Cooperative Bank (29.16%).
Source: Capital (20.08.2013)

Euroins is to acquire Interamerican’s business Dutch financial group Achmea will sell its insurance business in Bulgarian-Interamercian to its local competitor Euroins. The deal is not expected to bring serious friction on the market, but it is a signal for the need of consolidation on it. Lack of growth on the Bulgarian insurance market makes it probably unattractive to foreign investors. Interamercian’s business has shrunk significantly in recent years in terms of premium revenues. At the same time the company has accumulated big losses, too. The deal is expected to be put to an end soon. It is to include sale of both general insurance and life insurance sections of Interamerican in Bulgaria. In the mother company’ s financial reports for the second quarter of 2013 it is explicitly said that Interamerican insurance company and Interamerican Bulgaria Life Insurance are considered as assets for sale. Thus Achmea’s strategy includes withdraw from the Bulgarian insurance market - either by selling the subsidiaries themselves, or through the sale of their insurance portfolio.
Source: Capital (21.08.2013)

Fitch Ratings has affirmed First Investment Bank AD's (FIBank) Long-term Issuer Default Rating (IDR) at 'BB-' with a Stable Outlook and Viability Rating (VR) at 'b-'. A full list of rating actions is at the end of this comment. KEY RATING DRIVERS: IDRS, SUPPORT RATING AND SUPPORT RATING FLOOR The affirmation of FIBank's IDRs are based on Fitch's view that there continues to be a moderate probability of support from the Bulgarian authorities in case of need, which is reflected in the Support Rating of '3' and Support Rating Floor (SRF) of 'BB-'. Bulgaria's Long-term foreign currency IDR is 'BBB-' with a Stable Outlook. Fitch views the propensity of the Bulgarian authorities to support FIBank as quite strong due to the bank's systemically important bank status, its almost exclusively deposit funding and representations previously made to the agency by the Bulgarian authorities. At end-H113, FIBank was the third-largest bank in Bulgaria with a total assets market share of 8%, and the second-largest retail deposit taker with a 13% market share. Fitch does not expect any changes in terms of support as a result of the proposed acquisition of MKB Unionbank (MKBU, BBB+/Rating Watch Negative/b+), as the latter has a small market share of 2% (see 'Fitch: No Immediate Rating Actions Following FIBank's Planned Acquisition of MKBU' dated 23 August 2013 at www.fitchratings.com). At the same time, Fitch believes the Bulgarian authorities have sufficient financial flexibility to support FIBank due to the country's low government debt and significant available fiscal reserves. FIBank's total liabilities were equal to a moderate 8.4% of GDP at end-2012, and 80% of FIBank's customer accounts are covered by deposit insurance, meaning that the bank's uninsured liabilities, with respect to which the authorities' would take the decision on support, comprised a low 23% of total liabilities (about 1.9% of GDP) at end-H113. Furthermore, 95% of these uninsured liabilities are customer deposits, which Fitch understands have been placed primarily by domestic clients. However, in Fitch's view, weaknesses in the bank's corporate governance and potentially high related party and relationship lending, could result in somewhat greater uncertainty about the authorities' readiness to support the bank in all circumstances. RATING SENSITIVITIES: IDRS, SUPPORT RATING AND SUPPORT RATING FLOOR FIBank's IDRs, SR, SRF are sensitive to a change in Fitch's assumptions about the availability of sovereign support for the bank. A downgrade of the Bulgarian sovereign rating would likely result in a downward revision of the SRF and therefore a downgrade of the Long-term IDR as it would indicate Fitch's view of a decline in the authorities' ability to provide support. On 11 September 2013, Fitch outlined its approach to incorporating support in its bank ratings in light of evolving support dynamics for banks worldwide (see "The Evolving Dynamics of Support for Banks" and "Bank Support: Likely Rating Paths" , at www.fitchratings.com). FIBank's SRF and SR could come under downward pressure if Fitch concluded that potential sovereign support for banks in Bulgaria, as a member of the European Union, had materially weakened relative to its previous assessment. KEY RATING DRIVERS: VR FIBank's VR reflects continued deterioration in asset quality combined with weak reserve coverage, pressuring capitalisation. The VR also considers weaknesses in corporate governance, potentially high related party and relationship lending, high loan concentrations and weak performance. On the other hand, the VR also considers FIBank's broad and stable to date deposit base. FIBank's regulatory non-performing (NPL) ratio, increased to 12.2% at end-H113 compared with 5.8% at end-2011. This was mainly as a result of large loans becoming NPLs, emphasising the risks associated with the high borrower concentrations. Furthermore, reserve coverage of NPLs was low at 32% and only increased to 39% if specific provisions (deducted from the capital base according to Bulgarian National Bank regulations) are added. At end-H113, exposure to the largest 20 borrowers stood at a significant 3.6x Fitch core capital (FCC). Amortisation of these loans is very limited, and some borrowers have been granted additional facilities, further increasing concentrations. Within the largest borrowers, there are already loans that are classified as NPLs. In Fitch's view, the risk of related party and relationship lending is high, given the two founding shareholders' interest in capital-intensive projects in the tourist industry, incomplete disclosure of the shareholder structure, and the quite high-risk nature of some loan exposures. Unreserved NPLs and watch loans (H113: 4.5% of total loans) equalled a very high 123% of FCC. In Fitch's view, this undermines the quality of capital, while the Tier 1 and total capital ratios, at 11.1% and 12.7%, respectively, at end-H113, were only slightly above the regulatory required and/or recommended minimums. Pre-impairment profit is moderate, supported only by sound fee and commission income. However, it is limited in terms of strengthening the bank's solvency through internal capital generation. The VR is supported by FIBank's strong retail deposit franchise and the absence of refinancing risk. Liquid assets in unconsolidated accounts (as per Bulgarian National Bank definition which includes 100% of mandatory reserves) were equal to an adequate 26.6% of deposits at end-H113 (17.9% if mandatory reserves are excluded). Fitch does not expect an impact on FIBank's VR from the potential merger with MKBU due to MKBU's moderate size (23% of FIBank's total assets at end-2012) and the limited difference between the two banks' VRs. However, the acquisition could be negative for FIBank's standalone profile if it results in a significant reduction in capital ratios or liquidity. The impact on these metrics will depend on the financial terms of the transaction, the details of which have not yet been made available to Fitch. RATING SENSITIVITIES: VR The VR could be downgraded further in case of continued deterioration in FIBank's loan performance and underlying asset quality, resulting in increased pressure on the bank's capitalisation. The VR could be upgraded if the bank is recapitalised. However, Fitch does not expect this given the absence of equity injections in recent years. The rating actions are as follows: Long-term IDR: affirmed at 'BB-', Outlook Stable Short-term IDR: affirmed at 'B' Viability Rating: affirmed at 'b-' Support Rating: affirmed at '3' Support Rating Floor: affirmed at 'BB-' Contact: Primary Analyst Banu Cartmell Director +44 20 3530 1109 Fitch Ratings Limited 30 North Colonnade London E14 5GN Secondary Analyst Agata Gryglewicz Analyst +48 22 330 6970 Committee Chairperson Artur Szeski Senior Director +48 22 338 6292 Media Relations: Peter Fitzpatrick, London, Tel: +44 20 3530 1103, Email: peter.fitzpatrick@fitchratings.com. Additional information is available at www.fitchratings.com. Applicable criteria, 'Global Financial Institutions Rating Criteria' dated 15 August 2012, 'Evaluating Corporate Governance' dated December 2012 are available at www.fitchratings.com. Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria here Evaluating Corporate Governance here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.
Source: Capital (20.09.2013)

Bulgaria's C-Bank Oks FIB Acquisition of MKB Unionbank Bulgaria's central bank BNB said on Thursday it has approved First Investment Bank's acquisition of 100% of the shares of MKB Unionbank EAD. "The deal is yet another major consolidation on the Bulgarian banking market following the successful merger of Bulbank, HVB Bank Biochim and Hebros Bank, which was a positive contribution to the stability and confidence in the Bulgarian banking system," the central bank said in a statement. After the acquisition of MKB Unionbank EAD, the assets of FIB reach over BGN 8.5 B, according to reports of the buyer. The consultancies for the deal were international financial advisor Lazard and First Financial Brokerage House. In mid-March, FIB was the only candidate buyer who filed a binding offer for MKB Unionbank. Another candidate to buy MKB Unionbank was Hungarian OTP Bank, owner of DSK Bank in Bulgaria. After the acquisition, FIB ranks third by assets, preceded by DSK Bank with BGN 8.9 B and Unicredit Bulbank with BGN 12.7 B. The value of the deal has not been disclosed. F
Source: Sega (20.09.2013)

Bulgaria’s FIBank wraps up acquisition of peer MKB Unionbank Bulgaria’s First Investment Bank (FIBank) [BUL:5F4] said on Thursday it has finalised the acquisition of 100% of peer MKB Unionbank, a former unit of Hungary's MKB. FIBank bought all 122,464,965 shares in accordance to the acquisition agreement it signed on August 15 with MKB, the buyer said in a filing with the Sofia stock exchange. On September 18, the transaction was approved by the Bulgarian National Bank and the country’s competition watchdog.
Source: econ.bg (11.10.2013)

Bulgaria’s MKB Unionbank is renaming to Unionbank and is making changes to its management and supervisory boards. The move reflect the recent change in the bank's ownership. On Thursday Bulgaria's First Investment Bank (FIBank) said it finalised the acquisition of 100% of MKB Unionbank from Hungary’s MKB. A general shareholders meeting appointed Milka Todorova and Pavel Yanachkov as executive directors of the bank and management board members, the press release said. Maria Ilieva will remain the bank's chief executive officer and chair of the management board, while Anna Asparuhove will keep her position as executive director. The shareholders also appointed new members of the bank's supervisory board.
Source: Standart (14.10.2013)

Case of VMZ‘s bankruptcy terminated Plovdiv regional court put a halt of the case for opening of insolvency proceedings against VMZ Sopot. The case was filed by two creditors of the troubled plant- Mechanical Plant-Devin JSC and First investment bank. Reason explaining this development is that VMZ and Mechanical Plant-Devin reached an arrangement to repay the amounts due. Despite this FIB also revoked its request. Thus the case is revoked but there is still a possibility the decision to be appealed before the Plovdiv regional court. Last year an attempt for privatization of the plant failed, after the sole candidate Emko OOD failed to reach the final phase in the procedure. The Rousse-based company did not deposit the obligatory BGN 3 million.
Source: Standart (17.10.2013)

Holding Roads opted for insolvency After several years of worsening financial results, failed attempt for insolvency, distraint on accounts and concerns that the company will not fulfill won orders Holding Roads officially acknowledged that it is likely to fail to meet its obligations. The company announced that it has filed a claim for bankruptcy because of poor financial performance. The claim is not a big surprise as financial reports of the company showed big debts, decreasing revenues and accumulation of losses. If the court accepts the claim this will be the consecutive infrastructure company, owned by Vasil Bozhkov that goes into bankruptcy. Before this such procedure was by entered Moststroy and its subsidiaries, as well as subsidiaries of Infra Holding. As to the end of September Holding Roads’ accounts in First investment bank and Unicredit bank are still impounded at the request of UBB to the amount of BGN 7.6 million. Due to unpaid installments on loans to Unicredit Bulbank property of Bourgas Shipyards was sold at a tender. It was mortgaged under the debt of the holding. Over BGN 1 million was received from the sale which resulted in reduction of part of the company’s debts.
Source: Capital (28.11.2013)

Banks with Bulgarian capital getting bigger and more powerful Banks with Bulgarian owners have been growing bigger, moving up the scale in terms of assets, it transpires from BNB data for October 2013. Three lenders with Bulgarian ownership saw their assets rise in October - Corporate Commercial Bank jumped to the 4th place in the chart, Central Cooperative Bank ranks eighth and Investbank is thirteenth. They overtook UBB, Societe Generale Expressbank and Bulgarian Development Bank (BDB) respectively. Thus, two of Bulgaria’s largest banks in terms of assets are controlled by Bulgarians – Fibank (4th) and Corporate Commercial Bank (5th). UniCredit Bulbank leads the chart, followed by DSK Bank. According to BNB stats, the downturn in banking sector profits continued in October. The sector’s profit in late October totaled BGN 511.4 million, down 8.8% y/y. On monthly basis, however, its positive financial result increased by BGN 45 million
Source: Capital (02.12.2013)

Russian auction house sells Bourgas Shipyards Russian auction house looks for new owners of Bourgas Shipyards . The anno8ncements are posted on its website. Assets of the Bulgarian company are divided into three lots, and the amount sought totals EUR 207 million. The deadline for bids from potential buyers is not clear, contacts with the seller are not given as well. The latest data from the Commercial Register reads that owner of the shipyard is the off-shore company Hunas Investment Limited, which holds 80% of its shares and is represented by persons associated indirectly with the main creditor of the yard - First Investment Bank. Of the three auction prepared, the highest starting price is of the production site with outbuildings and equipment, which have produced over 850 boats in its 65-year history. Bidding for these assets will start from EUR 130 million. Another site is the maintenance plant that is certified to take 25 thousand ton ships and has its warehouses. Its starting price is EUR 65 million.
Source: Capital (03.12.2013)

Court declares Bulgarian lead, zinc smelter OTZK insolvent A Bulgarian court has declared local Lead and Zinc Complex insolvent, a court filing indicated. Lead and Zinc Complex cannot cover its current (short-term) liabilities of BGN126.9 million with its liquid (short-term) assets of BGN 91.02 million listed in its balance sheet as of June 30, 2013, the Kurdzhali district court said. The decision can be appealed within seven days. A meeting of the company’s creditors will be held on December 18. For initial date of insolvency was accepted 31st of December 2012. Lead and Zinc Complex's net loss widened to BGN 38 million in the first-half of 2012 from BGN 5.1 million in the same period of 2012. In September 2012, Sofia-based Harmonee 2012 bought 50% of indebted Lead and Zinc Complex for BGN 8.6 million.The company's major creditors are Viena-based MFC Commodities and Bulgarian FIB. The foreign company has claims as a trading partner of Lead and Zinc Complex under unrealized contract for delivery of metals.
Source: Capital (04.12.2013)

Holding Roads’ offices sold due to debts of lessors Road construction company Holding Road’s office, which has recently opted for insolvency, is sold on a tender due to debts. Owner of the property is JP consult, registered on 14 Iskar Street. Until recently controlled by Vasil Bozhkov company held major package of shares in the holding, though its ownership was transferred to offshore companies. Nove JSC Holding officially said that it has no ties with the holding’s business. Major part of Holding Roads’ business, a subsidiary named PST Holding was sold several months ago. Initial price for Holding Roads’ office is BGN 3 million. The property includes six apartments, cellars, yard and attic. The office is located at the second, third and fourth floors of 3 Moskovska Street, where the company is registered. The term for handing out offers is the 2nd of January 2014. The company lessor JP consult has accumulated lots of debt. Their total value was BGN 8.44 million, as compare to total assets of nearly BGN 7.2 million
Source: Capital (06.12.2013)

BG machinery old-timer Remotex on the edge of bankruptcy? For more than a month, Remontex workers in Radnevo have been staging a protest over their unpaid wages. The majority of employees out of the total of 600 have not received a penny of salary since February. Many of the protesters are on the brink of despair. A worker fainted at one of the rallies and was hospitalized because he had not eaten anything for 2-3 days. Another desperate worker had to sell the iron springs of the bed on which his children sleep in order to be able to feed them. The machinery complex is owing more than BGN 2.5 million to the state in obligations for social and health insurance. More importantly, however, the owners find it increasingly difficult to manage its largest credit: BGN 15 million to the First Investment Bank. REMOTEX-RADNEVO EAD was established in 1966 as a basic machine building, engineering and production unit of Maritsa Iztok Complex dealing with repair and spare parts production for heavy mining, transportation and power engineering equipment. Since 2002 REMOTEX-RADNEVO EAD has differentiated as one of the largest repair and restoration companies in the countrywith a complete cycle of metal treatment, steel output, steel casting, forging, heat treatment, mechanical processing, finishing and welded structures roduction. The privatization of the compex in 2002 happened under the then-PM tsar Simeon Saxe-Coburg at a public auction for a suppressed price of BGN 9.3 million. According to experts, only the orders from mines and thermal power plants for 2002 were over BGN 10 million. A stock company named "Flight 2" won the tender. However, it turned out that one of its partners was the wife of then- Minister of State Administration Dimitar Kaltchev. Over the years, shareholders came and went, but instead of strengthening and developing it, they were only looking for how to drain it. Before Remontex was privatized, it used to have a relatively modern equipment and a unique technology for the repair of heavy equipment in mining and thermal power equipment. Practically, it had no competitors, at least not for Maritsa - East. The new owners, however, did not invest in its maintenance and modernization , and directed the earnings to other branches, including overseas. The staff of 1400 people gradually melted to 600. Because of the irregular payments of salaries over the years, most specialists have left the complex, pushing it into a total decay.
Source: Standart (08.12.2013)