April 17 (SeeNews) - Bulgaria's Investbank has signed an agreement to acquire Victoria Bank for an undisclosed sum, the administrator of Victoria Bank's bankrupt parent, Sofia-based Corporate Commercial Bank (Corpbank), said.
"The administrator of Corpbank has signed a framework agreement with Investbank for the transfer of 100% of Victoria bank's capital and the entire financial exposure of the bank's sole owner to Victoria Bank at the agreed price," Corpbank said in a statement late on Monday.
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The deal is subject to approval by Bulgaria's Commission for Protection of Competition.
Under the agreement, Sofia-based Investbank will fully repay the exposure of Corpbank to Victoria Bank along with the interest due at the date of the transaction.
According to the statement, the achieved price of the deal plus Victoria Bank's long-term and short-term debt repaid since 2015 will not only cover the investments made by Corpbank in the form of shares and financial instruments in June 2014, but will also generate a profit of 2.8 million levs ($1.77 million/1.43 million euro).
In June 2014, Corpbank finalised the purchase of Credit Agricole's local unit and renamed it to Victoria Commercial Bank. However, later that month Corpbank was hit by a run on deposits, prompting Bulgaria's central bank to place it and Victoria Bank under conservatorship, suspending all payments.
In November 2017, the administrator of Corpbank said that Sofia-based Bulgarian American Credit Bank (BACB) and Investbank have submitted binding offers for the purchase of 100% of Victoria Bank.
In March 2018, the central bank said it has issued preliminary approvals to Investbank and BACB to purchase Victoria Bank, adding that the strategy of each of the two bidders envisages absorbing Victoria Bank within six months after the acquisition is complete.
The previous attempt to sell Victoria Bank failed last year after the central bank refused to grant preliminary approval to a request of Sofia-based D Commerce Bank to acquire 100% of Victoria.
Investbank is Bulgaria's 12th largest bank in terms of assets as of end-February in a market on which 21 banks and five foreign branches operate, according to central bank data. Victoria Bank is the country's smallest bank by assets.
(1 euro = 1.95583 levs)
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