EURECO WILL AGAIN TRY ITS CHANCES ON THE BULGARIAN MARKET
The Bulgarian Holding Company (BHC) is putting up for sale its share in the Bulgarian Pension Insurance Company (BPIC), the BANKER weekly learned. We are presently holding negotiations with the Supervisory Board of the BHC, Haralambi Anchev, Chairman of BHC's Supervisory Board confirmed the news. The fact that due diligence is currently going on in the pension insurance company also bespeaks of the possibility that it might soon change its majority owner. The international company Deloitte Touche has been entrusted to carry out the audit, and the accounting and legal appraisal has been ordered (according to reliable sources) by the financial group Eureco.
Eureco is known in Bulgaria mostly by its declared intention to participate in the bidding for the State Insuranec Institute (DZI). In the beginning of 2001, however, Eureco's representatives withdrew from the privatisation procedure due to DZI's bad financial state. Eureco had offered to the former government to take over the management of the state-owned insurer for a period of two years and turn it into a competitive player on the local market by investing about USD2.5MN in it. The offer of the financial group projected that the State should put DZI up for sale only after its financial stabilization.
Independent financial experts believe that as the negotiations with the single candidate buyer of the state insurance company - TBI - are at a dead-lock, the best option for its future is that, proposed by Eureco.
It is said that several serious investors, BNP-Paribas, Japan's Tokuda, and two British pesnion funds among them, have queued up for the BPIC.
Two months ago the BHC was holding a 50% stake in the pension insurance company. A decision for increasing its capital from BGL3MN to BGL6MN was made at its last general meeting of shareholders. The new issue was entered only to the BHC and DZI, which was holding 40% of the BPIC. The Sofia City Court, however, refused to enter DZI's share in the Commercial Register with the motive that it is in divestment procedures and has not been granted by the Privatistion Agency a permission to acquire new shares. Thus, BPIC's capital is currently less than BGL4.5MM. The BHC holds a 66.7% stake, DZI's owns 26.7%, and the balance of 6.6% is in the hands of several small shareholders. DZI has duly litigated Sofia City Court's ruling but the result will not be known till September. Nevertheless, the bidders for the pension insurace company will be able to acquire a majority package of its shares, as the small shareholders have declared their readiness to sell their stocks.
The BPIC is among the top local pension insuranec companies. According to recent data, its net assets exceed BGL10MN, and more than 150,000 people are insured in its 3 funds. This explains the interest which Eureco and the other candidate buyers have shown towards the company.