Банкеръ Weekly



The future of the State Insurance Institute (DZI) will become known within two weeks, Apostol Apostolov, executive Director of the Privatisation Agency (PA) announced. Procedures for the sale of the state-run insurer were opened in the summer of 2000. But after allegedly great initial iterest on the part many investors, a single offer was filed at the PA on February 10, 2001. The candidate buyer for DZI was a consortium between the Dutch financial holding TBI and the DZI-2000 management-employee buyout company (MEBO). DZI was evaluated at about USD35MN by Deloitte Touche in end-2000. The candidate buyer, however, offered USD20.5MN for 67% of the state insurer's assets. Moreover, the consortium's offer projected that most of the purchase price should not be paid in cash, but in payment instruments of the Italian and Spanish debt.The financial parameters and the payment scheme turned out to be the stumbling stone for the completion of the prepared deal, which was not finalized altyhough negotiations dragged on for more than seven months, representatives of PA's expert panel, authorized to sell DZI, announced in front of the BANKER weekly.A deal with the consortium could be closed only if it revises its offer and pays in cash, Mr. Apostolov explained. At a press conference on Tuesday (October 2) he specified that TBI was granted a 2-week term to improve its offer. Otherwise, the PA would invite a new divestment procedure.The PA has not set officially any terms or requirements for the purchase of DZI, TBI's representative Evgeni Popov told the BANKERR weekly. According to him, it is not logical to demand a higher price for the state insurance company, having in mind that DZI'e expert evaluation was made a year ago. Our shareholders are weighty financial institutions and they would like to know how much DZI costs presently, Mr. Popov commented.In June TBI demanded from the PA an updated version of DZI's evaluation, and in July the Agency invited a tender for nominating an auditor. Three companies bid for carrying out due diligence of DZI, but no winer was picked up. PA's employees then explained that a new managerial team of the Agency was going to be appointed and as PA's new officials would continue the negotiations for DZI's sale, it would be proper for them to choose the auditor of the state insurance company.

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