Банкеръ Weekly



The first general meeting of shareholders in the State Insurance Institute (DZI), to be invited by the company's new owner, will be held in end-September or the beginning of October, Emil Kyulev told the BANKER weekly. According to him, all formalities regarding the deal will be finalized within about ten days. DZI's shares are yet to be transferred, and a permission should be obtained from the Agency for Insurance Supervision (AIS) for acquiring more than a 5-percent stake of DZI's capital. We believe that this matter will be settled within two weeks at the most and we hope there will be no problems after the state insurer's buyer has already been approved by the Privatisation Agency (PA), Roumen Galabinov, Chairman of the AIS, commented.The contract for DZI's sale was officially signed at the PA on August 27 (Tuesday) by Mr. Kyulev and PA's Chairman Apostol Apostolov in the presence of Finance Minister Milen Velchev. With DZI's sale the entire insurance sector went into private hands, the Finance Minister said. The purchase deal on Bulgaria's biggest state insurance company was approved by PA's Supervisory Board on August 20. An 80-percent stake in DZI was acquired by the Sofia-based company Contract Sofia, owned by the local banker Emil Kyulev, at EUR21.5MN. Eighty per cent of the purchase price - EUR17MN - is payable in cash and will go to the state budget. The balance of 20 per cent, to be deposited in an escrow account, is earmarked for settlement of hidden liabilities of the company. We are currently checking the state of DZI, Mr. Kyulev said.Within 30 days DZI's new owner will pour BGN2.5MN in the company and another BGN11MN will be invested over the next five years. Total investments in the top local insurer are projected at BGN13.5MN.DZI was sold at better terms than what was proposed in the initial offer, Finance Minister Milen Velchev commented. A previous attempt to sell the company was cancelled last November after the only bidder - a consortium between TBI and the MEBO DZI 2000 - offered USD20.5MN for a 67-percent stake in the state insurer. The candidates, however, wanted to pay 75% of the selling price through a debt-for-equity swap, settling Bulgaria's liabilities to Italian and Spanish financial institutions. The amount of offered investments was insignificant, too - just BGN2MN.The possibility for the Greek insurance company Interamerican to act as Contract Sofia's consultant in DZI's management seems less and less probable. I'm not optimistic about their participation. But there is sufficient interest towards DZI on the part of other companies, Emil Kyulev commented. According to him, the company will focus on combining bank and insurance products in the future. The network, which will offer such combined services, will be developed as well.The remaining 20-percent stake of the former state insurer, is expected to be put up for sale on the stock exchange by end-October.In front of the BANKER weekly Mr. Kyulev said:We are extremely content with the procedure for DZI's sale and the parameters we have achieved. Through this deal ROSSEXIMBANK and DZI will set up a financial group that will be one of the biggest in Bulgaria. The high price which is good for the PA is not always good for the buyer, but I think we reached a reasonable balance.Our first step will be to invest BGN2.5MN in the company within 30 days. I believe an investment of BGN11MN, or a total of BGN13.5MN over the next five years, will be the minimum amount of investments in the company. We'll probably invest more than that.According to me, DZI has the potential to be a leader in the local insurance sector and I hope the company will soon regain the positions it held on the market some ten years ago.DZI's management will be carried out by its incumbent managerial team, and its operations - by the present personnel and additionally attracted experts. In my opinion, DZI needs to recruit extra highly qualified staff in order to regain its former leadership positions. Therefore, I expect new working positions to be opened in the company.

Facebook logo
Бъдете с нас и във