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SOFIA (Bulgaria), December 22 (SeeNews) - Bulgarian diversified group Doverie United Holding [BUL:5DOV] said on Friday it is withdrawing from negotiations for acquiring a 50.01% stake in Moldova's Victoriabank.
The holding said it has received preliminary approval from Moldova's central bank for its plan to acquire more than 50% of the bank's capital and has held negotiations with an unnamed potential seller.
"No agreement has been reached on the parameters of the deal, which is why Doverie United Holding terminates the negotiations and gives up its intention to make the investment," Doverie United Holding said in a bourse filing.
According to information posted on Victoriabank's website, as of August 10, 2017 the bank's main shareholders were Cyprus-registered Insidown with 39.2%, the European Bank for Reconstruction and Development (EBRD) with 27.56%, Romania-registered Notar with 2.36%. The remainder is held by individual investors.
In November, the EBRD said that Romania’s Banca Transilvania [BSE: TLV] intends to acquire an initial stake of over 39% in Victoriabank, Moldova’s third-largest lender.
The EBRD increased its shareholding interest to 27.5% last year in a move to restore effective corporate governance and attract a strong strategic investor to Victoriabank. As a result of the planned investment, Banca Transilvania and the EBRD will jointly hold a controlling stake in Victoriabank. In line with the law they will then offer to buy the remaining shares.
The EBRD invested in Victoriabank in August 1995, alongside the bank’s founders, to support a locally owned, sound commercial bank with high standards of corporate governance and integrity. This goal has been frustrated since June 2006 when the control of Victoriabank’s supervisory board passed to non-transparent shareholders, EBRD said in 2016.
The EBRD aims to strengthen the position of shareholders who are transparent reputable, with the aim of restoring corporate governance. However, according to EBRD, lack of shareholder transparency remains a major concern for the Moldovan banking sector and has negative implications for investment and the country’s financial stability.