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Sun 20 Jul 2014 07:07 PM

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Oman fund said to be working to rescue Bulgaria's Corpbank

Source says Oman's State General Reserve Fund hopes to put together plan to stabilise bank within 3 months

Oman fund said to be working to rescue Bulgaria's Corpbank

Oman's State General Reserve Fund (SGRF) is seeking with other shareholders to stabilise Bulgaria's Corporate Commercial Bank and hopes a feasible plan will be put together within three months, an SGRF source told Reuters on Sunday.

A planned state bailout of the bank ran into opposition in Bulgaria's parliament, so Finance Minister Petar Chobanov spoke with the head of the SGRF last week about the prospect of the Omani fund helping out.

"The Bulgarians have agreed to work with the shareholders to provide a feasible working plan within a timeframe of three months, as a substitute for the nationalisation option," the source said, declining to be named under briefing rules.

The Omani sovereign wealth fund is potentially a key player in Bulgaria's banking crisis because it owns 30 percent of Corpbank, which it bought in 2009.

Corpbank was forced into the control of Bulgaria's central bank in June after customers, unnerved by reports of shady deals by the bank's main owner, withdrew more than a fifth of its total deposits. A subsequent audit showed activities at the bank "incompatible with the law and good banking practices", according to the central bank.

The SGRF source said any solution to Corpbank's problems would not necessarily mean Oman investing additional money into the bank.

Instead, he said, proposals included diluting Corpbank's main owner - wealthy Bulgarian businessman Tsvetan Vassiley, who has denied the allegations against him - with funds from other international investors.

Another proposal is to reinforce Corpbank's management board with independent experts, the source said, adding that the SGRF wanted to help stabilise Corpbank because of its important role in Bulgaria's economy.

"Oman sees Bulgaria as a friend, and we are confident that the Bulgarian government and the other shareholders will work toward getting the best out of this delicate situation, and to reopen Corpbank with a more stable situation," he said.

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