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Bulgaria Sells Commecial Bank

July 26, 2002

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SOFIA, Bulgaria (AP) _ The Bulgarian government is selling the country’s fourth largest bank to Bank Austria Creditanstalt.

Under the deal, Austria’s leading bank will pay 82.5 million euros ($82 million) for Biochim Bank, which controls roughly 7 percent of the Bulgarian market.

The contract, signed Friday by Finance Minister Milen Velchev and Bank Austria’s chief executive Gerhard Randa, stipulates that Bank Austria can’t sell of transfer Biochim shares for three years after the purchase.

The deal is expected to be formally sealed in late September or early October.

The Bank Consolidation Company, the government body that manages the privatization of state banks, picked Bank Austria’s bid over bids submitted by the Bulgarian Rosseximbank in consortium with Russia’s MezhPrombank, British-based Charlemagne Capital fund and Bulgaria’s Hebrosbank, which is owned by Hong Kong investment fund iRegent.

The sale of Biochim Bank is part of a government privatization program aimed at improving the country’s ailing economy.

The World Bank has demanded that Bulgaria sell four of its largest state-owned companies to qualify for up to $750 million in loans over the next three years.

Besides the Biochim bank, Bulgaria plans to sell the tobacco monopoly Bulgartabac, the Bulgarian Telecommunication Company and the State Insurance Institute.

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