June 24, 2014 / 1:40 PM / in 4 years

Current shareholders unlikely to rescue Corpbank - Bulgaria PM

SOFIA, June 24 (Reuters) - Existing shareholders in Corporate Commercial Bank (Corpbank) are unlikely to inject capital into the lender, Bulgarian Prime Minister Plamen Oresharski said on Tuesday, signalling Corpbank would likely need a state rescue.

A run on Corpbank last week prompted Bulgaria’s central bank to take control of the country’s fourth largest lender, freeze its operations and start rescue talks with shareholders.

A Bulgarian businessman owns just over half of the company, Oman’s sovereign wealth fund has around 30 percent and VTB investment arm VTB Capital owns 9.1 percent. The government has given them until Friday to commit funds to a capital increase, else it will likely be rescued with state money. VTB on Tuesday announced it had no plan to inject capital into Corpbank.

“After an estimate of the assets and the liabilities, the law requires the current shareholders be asked to cover the shortage and ensure liquidity,” Oresharski told reporters.

“This is something we doubt will happen, obviously the whole society doubted it. That is why there were tensions and that led to the plan that we presented to you.” (Reporting by Angel Krasimirov and Tsvetelia Tsolova; Editing by Matthias Williams and Alison Williams)

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