If the scenario for an organised attack against Euroins Romania, a unit of Bulgaria’s Eurohold group, succeeds - an administrator is appointed at the company and a possible default is triggered, this would also impact the Bulgarian capital market, Assen Christov, chairman of Eurohold’s supervisory board, said.
“A default of the company would lead to a spillover of this crisis to Bulgaria. We are trying to limit this now, together with the other shareholders. However, there are people working in this direction - to bring about an economic and political crisis everywhere [both in Romania and Bulgaria],” Christov said in an interview for Sofia-based Nova TV channel.
“We are the largest holding in Bulgaria, with more than 2.5 billion euro revenues [annually], more than 4,000 employees, and we are represented in 12 countries,” Christov said. In the event of a possible crisis, the Bulgarian capital market would also be affected, as the impact would be “unimaginable” considering the exposition of Euroins Romania on the local capital market and the small scale of the Sofia stock exchange, he added.
Eurohold Bulgaria, a leading energy and financial group in Southeast Europe, is listed on the Bulgarian and Warsaw Stock Exchange.
Christov’s statement comes after over the weekend Eurohold said that its unit Euroins Romania is the target of a hostile takeover attempt. Euroins Romania is the largest subsidiary of Euroins Insurance Group (EIG) – Eurohold’s subsidiary insurance group. According to the Eurohold management, the attack against Euroins Romania involved a number of senior and mid-level management employees of the insurance department of the supervision authority of the Romanian financial regulator (ASF), as well as people involved in the crisis with the bankrupt City Insurance. ASF has so far declined any comment.
Prior to the bankruptcy of City Insurance, Eurohold on several occasions received offers to buy its portfolio, thus assuming its liabilities in one form or another, and when it refused to do so, came under “extreme pressure, with distortion of facts and data”, Christov said in the interview. “Immediately after that, all kinds of checks began,” he said. “There was turmoil in the market there, and definitely our company, as well as many others, needed capital, because the prices were seriously dumped,” Christov said.
He, however, stressed that the company has met all its law-prescribed obligations. “We have contributed more than 100 million euro in the last two years, and together with that we have attracted the European Bank for Reconstruction and Development (EBRD) as our co-shareholder.”
At the end of 2022, the Financial Supervision Commission in Bulgaria approved the acquisition of a minority stake in EIG by the EBRD. The transaction was preceded by a detailed and complete audit of the financial position of the insurance group and its subsidiaries, including Euroins Romania.
“We do not in any way oppose the local financial regulator,” Christov also said. “It's not about the whole regulator, it's about certain people in the regulator. Therefore, we are raising the alarm and hope that the other members of the regulator's board will not succumb to these suggestions and manipulated data this time.”
“Luckily, we have exceptional support from our [Bulgarian] financial regulator, […] who have looked into the case, backed us, held meetings with the Romanian regulator, I hope this has had an effect. The other institutions understand us perfectly,” he commented.