THREE CANDIDATE BUYERS TO EXAMINE DZI
Three candidate buyers will examine the financial situation of the State Insurance Institute (DZI) next month. These are Czech Poishtyovna (one of the biggest insurance companies in the Czech Republic), Allianz (which is bidding through the insurance company Energy where it hold a 42.5% stake), and ROSEXIMBANK in a consortium with Interamerican. They will be appraising the state insurer according to premium proceeds, market share, efficiency of the branch network, and number of the employees.Representatives of Allianz are already getting acquainted with DZI's situation, insiders announced. The other two comapnies are expected to begin their pre-privatisation examination by the end of next week.Offers for the purchase of the state insurer should be submitted to the Privatisation Agency (PA) by July 1. The second and last round of the tender for DZI's sale began on May 29. The candidates deposited BGN2.5 each to PA's account in order to participate in the bidding. PA's experts will have a month after July 1 to nominate the buyer. The candidates will be rated on the grounds of the offered purchase price (which will be decisive for the final appraisal) and the proposed business programme, which will be estimated accoring to the projected investments and number of personnel. As the BANKER weekly has already written, DZI's new owner is to become known by August 1.According to experts, DZI's future development will depend on the candidate who wins the bidding. DZI stands all chances to become a leader on the market if purchased by Allianz. In such a development of the deal more than 50% of the insurance market will be didvided between two companies - Bulstrad (which has been a leader on the market since the end of 2001) and Allianz, which would become the biggest structure in the branch. If the state insurer is acquired by Czech Poishtyovna, DZI will again have the advantage of a world-rank company standing behind it.In case DZI is bought by the consortium between ROSEXIMBANK and Interamerican it will develop general insurance (the entire cycle of the offered financial services will be ended through ROSEXIMBANK). Life insurance, on the other hand, is expected to be entrusted to Interamerican.The PA will ask between USD30MN and USD35MN for 80% of the state insurer's capital. (The remaining 20% will be divested through the Stock Exchange). According to PA's experts, preliminary talks with the candidates showed that they were ready to pay between USD25MN and USD30MN. However, they explained it was too early to say what the final agreements would be.The premium proceeds of DZI-General Insurance amounted to some BGN19MN in end-April, up from BGN14.24MN for the first quarter of 2002, which was about BGN400,000 down from the same period of last year.