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Wed 25 Jun 2014 04:59 PM

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Oman fund in talks with Bulgaria about Corpbank rescue

Sovereign wealth fund said to hold discussions with government about recapitalising Corporate Commercial Bank

Oman fund in talks with Bulgaria about Corpbank rescue

Oman's sovereign wealth fund held talks with the Bulgarian government and central bank on Tuesday about recapitalising Corporate Commercial Bank (Corpbank), Oman's honorary consul in Sofia told Reuters on Wednesday.

Bulgaria plans to nationalise the bank, which suffered a run on deposits last week and was subsequently taken over by the central bank, if talks with shareholders including Oman fail.

That prospect looked the most likely outcome after Prime Minister Plamen Oresharski said on Tuesday that shareholders were "unlikely" to rescue the country's fourth-largest lender.

It was not known whether he was speaking before or after the meeting with the sovereign wealth fund.

"Talks took place yesterday, but I do not know the outcome," Oman's honorary consul Stoyan Denchev told Reuters on Wednesday. His comment was the first indication of the Oman fund's response to the bank crisis.

Another shareholder, Russian bank VTB said on Tuesday it had no plans to inject capital into Corpbank.

Bulgarian businessman Tsvetan Vassilev owns just over half of the company, Oman's sovereign wealth fund has around 30 percent and the investment arm of VTB owns 9.1 percent.

The Oman fund, which has not publicly commented on its intentions towards Corpbank, had earlier sent a letter to Bulgarian authorities about holding talks to protect its interest in the lender, the consul said.

The fund did not respond to repeated requests for comment. The central bank declined to comment on the consul's remarks on Wednesday.

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