Банкеръ Weekly

Briefs

SECRECY AND WEAK INTEREST CHARACTERIZE THE PRESENT RPIVATISATION PROCEDURE FOR DZI

CZECH POSHTOVNA AND ROSEXIMBANK - AMONG THE CANADIDATESAccording to inofficial information, an offer for the privatisation of the State Insurance Institute (DZI) was filed by one of the bigegst insurance companies in the Czech Republic - Czech Poshtovna (a state-owned company, established in 1827, based in Prague). Its structure includes five subsidiaries - insurance companies, a bank, a leasing company, and an investment company. ROSEXIMBANK is also among the candidate-buyers.Rumours in the press about a mystical American investor who has filed an offer, have not been confirmed so far. The TBI consortium - the only candidate purchaser during the previous divestment procedure - has not submitted an offer this time, the Privatisation Agency (PA) insiders announced. According to the same sources, the Pan-european insurer Eureco will neither take part in the bidding. Until some days ago rumours were circulating that the company would participate in the competition through the Greek insurance company Interamerican, in which it holds more than 98% of the capital. Austria's giant Winerstetische is also among those who gave up to take part in the bidding.Complete secrecy, unknown till now in PA's practices, vailed the present procedure for the sale of the state-run insurer. Only one official in the PA has been entrusted to keep track of the number of sold information memranda and candidate-purchasers. The details are kept in secret even from the team, which has prepared the package of documents for DZI's sale, insiders claim. The probable reason for the secrecy regarding one of the most expected privatisation deals, is the demand of candidate-buyers to keep their offers in secret till the last moment. This is strange because the information stimulates competition, experts comment. Another reason is that the candidate-buyers turned out to be much less than expected and tension is artificially kept high in order to make the buyers submit higher offers. The interest towards DZI's sale is week, PA sources say. The term for filing offers for the first round of the tender expired on April 15. The present procedure for DZI's divestment, when 80% of its capital was offered for sale, was opened on March 11, 2002. DZI's memorandum, which was presented to the candidate buyers during the first round, contains data about the company's financial state from the year 2000, pundits claim. Only after the initial offers are evaluated and the second round of the tender begins, candidate-buyers will get data about the insurer's financial results for 2002 (which are much better than those for 2000). Potential purchasers will have a week prior the second round of the bidding, within which they could conduct their own due diligence of DZI's financial state.In order to pass through the second round, potential investors should present a price offer, a project for the insurance company's development in a medium and long term, and specify the origin of the money with which they will buy DZI.Meanwhile, it became clear that a single offer - from Chimimport - had been submitted for the purchase of the insurance company Armeets, which is within DZI's structure. As early as a month ago the BANKER weekly informed that the most probable candidate-buyer is a company from the structure of the Varna-based strong-arm group TIM.Armeets has been officialy evaluated by Deloitte Touche at BGN6.5MN. The PA has put up for sale 91.1% of the company's capital, owned by DZI. The premium proceeds of Armeets for 2001 amounted to BGN7.3MN, and its market share was a little below 2 per cent. The minimum purchase price has been set at BGN3.5MN.In the beginning of 2002 information appeared that Austria's insurer Winerstetische was interested in Armeets. Later on, it turned out that the company was too small for the strategy of the Austrian insurer and it did not submit an official offer. Having in mind the lack of other caniddate-buyers, Chimimport has considerable chances to become the owner of Armeets, PA experts commented. The company aims to expand its activities on the financial sector and Armeets is suitable for the realization of that intention.

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