The Slovenia Times

Reinsurer Gears to Build No 2 Insurance Group in SE Europe


The reinsurer will issue up to 7,857,143 new shares at between EUR 7 and EUR 9 apiece. The shareholders will have a pre-emptive right but the final price will be set on the basis of demand by institutional investors.

The company's chairman Zvonko Ivanušič expects more than 40% of the exiting shareholders to subscribe for new shares. "Surprisingly enough, there's quite a lot of interest from abroad," he stated after the meeting.

Interest has been expressed by a dozen foreign investment funds that are willing to participate with contributions of EUR 5-10m, and most recently also the European Bank for Reconstruction and Development.

Ivanušič expects new shares to be paid in by the beginning of June. The prospectus is to be published after the audited operating report for 2012 comes out, that is in late April.

This will be followed by a roadshow at the beginning of May, so that the capital injection is carried out by the end of May or beginning of June.

Shares in Pozavarovalnica Sava have been listed on the Ljubljana Stock Exchange since the initial public offering (IPO) in 2008. The share closed at EUR 8 today, down from EUR 28 in the IPO.

In the 2008 IPO the state-run SOD fund reduce its interest in the reinsurer from 99.87% to 25%.

To enable SOD and the existing shareholders to withdraw from the investment, the management is considering listing shares at least on one more stock exchange, according to Ivanušič.

He did not know yet whether SOD would participate in the latest recapitalisation. "If they do and defend their shareholding, this will probably be useful, but it is their call to make," the chairman said.

Deeming the price of new shares too low, a minor shareholder filed a counter-proposal for a capital injection in the amount of EUR 55m at EUR 13.50-14.50 apiece, but then withdrew the proposal and announced he would challenge the adopted management-sponsored proposal in court.

Ivanušič promised dividend payments for 2014, equalling 30% of the distributable profit for this year, which is to increase to 40% by 2017.

Pozavarovalnica Sava already holds 49% of Zavarovalnica Maribor (ZM), Slovenia's third largest insurer, but will become a sole owner by acquiring another 51% from the NKBM bank for EUR 65m.

The reinsurer already paid EUR 15m for 11.79% of ZM shares in December, and will use EUR 50m of the money raised through the fresh share issue to buy the rest 39.21% from SOD, which only entered ZM temporarily.

The remaining EUR 5m of the capital injection approved today will be used to stabilise capital adequacy and to cover costs, according to Ivanušič.

Pozavarovalnica Sava already owns insurer Tilia. After including ZM in the group it hopes for EUR 504m in consolidated premium. A merger of insurance companies in the group is not planned, but the support services will be merged straight away.


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