Winter Tourism: 1.8 Million Visit Bulgaria
Bulgaria has witnessed a bustling winter tourism season, with a total of 1.8 million tourists gracing its picturesque landscapes from December 1 to March 25
The shares price of First Investment Bank (FiBank) fell to about BGN 1.80 per share, according to the trading data on the Bulgarian Stock Exchange.
This is lower even than the price (about BGN 2.50) at which the securities were traded at the beginning of the summer, when the state bought an 18.3% stake in the bank for 140 million euros. Lv. arguing that this is the last condition for Bulgaria's admission to the EU Banking Union and the euro area waiting room. In the transaction, the state paid BGN 5 per share, i.e. twice the market price.
Because of suspicions that the deal was unprofitable for the budget, parliament formed a temporary committee to establish the facts and circumstances related to it.
However, it was clear at the hearing from the explanations of the institutions concerned that the price of BGN 5 was even undervalued and the state actually bought the package of shares almost "on promotion".
There were several arguments in favor of this thesis. First, FiBank‘s share price on the stock exchange is not at all an indicator of their value, because the volumes on the Bulgarian stock market are too low.
Secondly, by law, public companies cannot announce a share price below their carrying amount, which for FIB's securities is calculated at BGN 8.87 per piece. That is why the initial official proposal of FIB from December 2019 was for BGN 8 per share. However, when approving the prospectus, the Financial Supervisory Commission intervened twice and a price of BGN 5 was eventually approved. So it turns out that the state has received a serious "discount" from the price.
After the deal with the state was concluded, the stock price gradually began to fall and recently has stayed at levels around BGN 1.80.
In November, due to the negative effects of the Covid-19 pandemic, FIB acquired a rating B from Fitch, which is five levels below the investment class limit and seven levels below the rating of Bulgaria. "This is also the lowest valuation among the Bulgarian banks surveyed by the agency, and the outlook for it is negative," Capital newspaper reported./Mediapool.bg
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