By Alexander Krassimirov
March 29 – Bulgaria’s Financial Supervision Commission (FSC) has refused to allow release of the prospectus for a second attempt in year at an initial public offering (IPO) by CSKA Sofia. Meanwhile, after a desperate plea by management for cash to save the club, fans have been donating money to ensure the club can get its license to play.
Last year Bulgarian club failed in its first bid to become a public company listed on Bulgarian Stock Exchange. The failed IPO sold only 360,000 shares – the minimum requirement for the club to become publicly traded was 1.4 million. 3 million shares had been released for sale at a price of BGN 3 (€1.5).
The club’s main shareholder Alexander Tomov has repeatedly said he will make a second attempt to club to float the club.
“The refusal (for giving any detail) is not just one reason,” said FSC Vice-President Vladimir Savov. “The main concern of our committee is to protect investors’ rights. They should be informed about the investment that they are offered – opportunities, financial information, potential risk transactions, exposure of the company. They should be able to make an informed decision whether to invest.
“The Financial Supervision Commission considered that the proposals from CSKA prospectus for public offering of securities does not ensure the protection of investors. It does not disclose adequately the situation of things in order to make an informed decision. There are many problems – large and small, which gave rise to many risks and doubt how the information provided is accurate,” continued Savov.
“In the previous offering of shares, the Commission considered that the necessary information has been fully disclosed. We remember that the IPO did not go well because there was not enough investor interest. A year ago there was full disclosure of the information. It was clear that the company is not in a flourishing financial situation at least. This was revealed. The Commission did not decide whether this is good or bad investment, but people need to be informed.”
While the the IPO is stalled, hundreds of CSKA Sofia supporters have responded to a call from management to support the club financially, so the club can receive its license. CSKA has only four days to cover debts amounting to nearly BGN 1 million.
The club turned to supporters for help after businessman Julian Indzhov refused to acquire a controlling stake which would have covered the club’s debts.
Just a few hours later, the social networks were flooded with pictures of payment orders, as fans demonstrated their support for the team.
“We want to thank you for the strong support that you have given the club the first day of the campaign to save the license. We are touched by the interest shown. You prove once again that there is no more powerful than the army indomitable spirit, which we have repeatedly been united in difficult times”, said the club in a statement.
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