Банкеръ Weekly

Briefs

WIENER STADTISCHE ATTRACTS A NEW SHAREHOLDER IN BULGARIAN ESTATES

The German insurer HUK-Coburg Holding has officially announced its willingness to acquire more than 5% of the capital of the two companies (the general insurance and the life insurance) with the common name Bulgarian Estates. The necessary documents were filed to the Agency for Insurance Supervision on Monday (February 3). The idea is that the German insurance group acquires a 26-percent stake in each of the companies.The general insurance and the life insurance companies were purchased in September 2002 by the Austrian Wiener Stadtische, which doubled their capital soon afterwards. The Austrian's investment policy has obviously projected the attraction of a new partner in the Bulgarian insurance companies. For the purpose they have chosen their strategic German partner with whom they have been operating jointly since 2001. Extraordinary general meeting of Bulgarian Estates have been scheduled for March 4, 2003, where decisions will be made for a second increase of their capital by 35 per cent. The condition is that the new shares would be bought out by the new shareholder. The capital of the general insurance company will go up from BGN6MN to BGN8.1MN, and that of the life insurance company - from BGN4MN to BGN5.4MN. After these changes the new shareholder will hold a 26-percent stake in each of the companies. Wiener Stadtische will remain the majority shareholder as owner of 70% of the cpaital (presently it holds 95% of it). The co-founders of Bulgarian Estates - Dancho Djikov (who is now Deputy Chairman of the two companies supervisory boards) and Angel Kraichev (CEO of the companies) - will already holds almost 2% of the shares (1.85%).In order to have legal grunds for such a decision, however, Bulgarian Estates should get a reply from the Agency for Insurance Supervision if it accepts the proposal for that change of ownership. The longest legally set term for that procedure is three months. The presence of a company of HUK-Coburg's rank in Bulgaria would be beneficial to the local insurance market. The stepping of the German group (based in the town of Coburg - the cradle of the last Bulgarian kings' dynasty) onto the Bulgarian market might have some sentimantal motives besides the business ones. HUK-Coburg is the second largest insurer in Germany in the sphere of property and credit insurance, and its customers total 6.8 million. The German insurance group was set up in Erfurt in 1933, and its headquarters moved to Coburg in 1950. The holding's structure consists of seven companies, including the general insurance, life insurance and health insurance companies, the housing savings fund, and the car insurance (which has the biggest share - about 60% of the aggregate premium proceeds from insurance activities). The premium proceeds amounted to EUR2.38BN in mid-2002. The holding's revenues totalled EUR2.45BN in the first half of last year, up 4.7% from the previous period. HUK-Coburg's structures employ 6,700 people.In 2001 the German insurer closed an agreement for partnership with the top Austrian insurance company Wiener Stadtische, and their first joint investment was in Poland where they purchased Compensa Genral Insirance and Compensa Life.In Germany HUK-Coburg ranks second after Allianz Group in terms of gross permiem proceeds. Its market share is about 10% and in the sector of insurance services to citizens it ranks first by an 18% market share.

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