Банкеръ Weekly



The Executive Board of the Privatisation Agency (PA) will propose next week negotiations for the sale of the State Insurance Institute (DZI) to be cancelled, PA's Executive Director Apostol Apostolov announced in front of journalists on Octonber 25. The reason for that extreme measure is that the consortium between TBI and the management-employee buyout company (MEBO) DZI 2000 has not agreed to pay the purchase price, demanded by the State - USD20.5MN for a 67% stake in the insurance company. As the BANKER weekly wrote several time, DZI's candidate-buyers offered to pay part of the price by settling Bulgaria's debt to Spain and Italy. According to Mr. Apostolov, however, this offer is unacceptable as the state insurer is listed for target privatisation, which means that payment should be effected in cash. If the proposal of PA's directors is approved by PA's Supervisory Board, a new tender procedure will be opened. Concurrently, a new consultant in the deal and a new valuator of DZI will be sought, Mr. Apostolov explained. Presently, Deloitte Touche is the consultant, valuator and auditor of the state insuranec company.According to PA's Executive Director, the cancellation of the present divestment procedure will not be fatal for DZI as there is a strong interest toward it on the part of investors. In addition to the Paneuropean insurer Eureco, which is allegedly a potential buyer of DZI, a Bulgarian bank has also announced interst towards the state insurance company, PA officielas explained. Informed sources said First Investment Bank was this financial institution, but its managers refused to comment.As far as Eureco is concerned, its interest towards DZI isn't anything new. It took part in the present privatisation procedure, but withdrew from the bidding at the last moment. A few months ago Eureco's managers placed quite an enticing offer - to take over DZI's management for two years, and afterwards buy the company out at very advantageous terms. This proposal has been recently renewed. Insurance circles do not rule out the possibility for Italy's Generali to renew its interest in DZI. Three Turkish financial groups are allegedly investigating the state of insurance business in Bulgaria, too.

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