Банкеръ Weekly



Negotiations on the sale of the State Insurance Institute (DZI) EAD will continue in October at the earliest, an employee of the Privatisation Agency (PA) announced for the BANKER weekly. In the beginning of August the PA invited a tender for a new evaluation of the state-owned insurer. Three of the four invited auditing companies filed applications for participation, hoping that one of them will be picked up to make DZI's new evaluation and finally announce its price. But PA's recent management did not undertake to nominate the tender winner with the motive that it would be right for PA's new managerial team to choose the valuator of the state-run insurer.
Under the tender terms, within 25 days after the nomination the auditor will have to prepare the new evaluation of DZI. And as no new executive director of the PA was appointed by September 5, this means that negotiations on the state-run insurer will be resumed in October at the earliest.
It's not yet clear if they will continue with the single bidder for DZI - the consortium between TBI and the management-employee buyout team (MEBO), set up by the state-owned insurer - or if a new tender procedure will be invited. During the last negotiations the consortium was ready to pay USD20.5MN for a 67% stake in DZI. The entire insurance company was valuated at USD35MN.
A new evaluation of DZI was necessitated because the negotiations for its sale lagged for quite a long time and the validity of the one done by Deloitte Touche elapsed in end-July. The same company has been auditing DZI for several years now. It is also PA's consultant on the devestment of the state insurer. According to pundits, it is namely Deloitte Touche that stands the best chances of winning the present tender for picking up DZI's valuator.
The financial performance of the three companies within DZI's group for the first six months of 2001 will be taken into consideration when preparing the new evaluation of the state insurer. Their aggregate premium income for this period amounts to BGL44.3MN. The companies Armeets and DZI-General Insurance hold 19.4% of the local general insurance market, and the market share of the life insurance company DZI is 41.06 per cent. As both the financial performance and the market shares of these companies are more than fair, experts believe that the new evaluation of DZI will be higher than the previous one.

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