EUROPE – Austrian insurance group VIG has offloaded its 92% stake in the largest Bulgarian pension fund Doverie, but some Bulgarians have called on the regulator to reject the deal.

The Doverie pension fund manages BGN1.8bn (€1bn) in mandatory pension assets for 1.2m Bulgarians.

VIG, in order to "focus on its core business", sold its majority stake in the pension fund for an undisclosed sum to United Capital, an investor group registered in the UK.

However, since the announcement was made, Bulgarian politicians, union members and even government officials have voiced concerns about the largest pension fund in the country being sold to an "offshore company" with "unclear ownership".

Plamen Dimitrov, president of union association CITUB, told IPE that minority shareholders in Doverie joined forces to convene an extraordinary shareholder meeting on 30 July.

He said he was concerned about the deal because "nothing is known about who the investors behind United Capital are", adding that, under Bulgarian law, companies can only buy pension funds using their own equity, not that of other investors.

VIG declined to comment on any of the questions on the deal put forward by IPE, including the purchase price or how the future owner was chosen.

The CITUB union association was one of the founding members of Doverie 13 years ago, when it held a 50% stake in the pension fund.

Now the share has shrunk to 1%, but for Dimitrov this means "all the more responsibility for pension fund members' welfare".

"Over the last 13 years, there have been seven changes in ownership of Doverie," he said.

"But it had always been a company with an insurance or investment background that acquired the pension fund.

"But now the ownership and capital structure of the new buyer are not transparent."

What was "really disturbing" about the deal, according to Dimitrov, was the purchase price, rumoured to be around €170m.

"This is completely overvalued, and the question is why someone would pay such a high price," he said.

The Bulgarian finance minister even said he hoped that the president of the financial supervisory commission would "consider the concerns raised with the deal and not let it happen", according to online news publication Capital.

The Financial Supervisory Commission (FSC) and the Bulgarian Commission on Market Competition, which have yet to approve the deal, are expected to announce their decision in the coming weeks.

In a press release on the deal, the company said Doverie was "a sound and economically successful company" but that pension funds were "not part of the core business of Vienna Insurance Group".

It added that it would continue to run its life insurance and property insurance business in Bulgaria.

In Austria, VIG holds a stake in the VBV Pensionskasse.

Apart from a mailing address, there is no publicly available information for United Capital.

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