Leading Croatian insurer, CROATIA Osiguranje, for sale

20 February 2012 — Daniela GHETU
croatia_osiguranjeCroatia plans to sell a majority stake in leading insurer CROATIA OSIGURANJE in a public tender, Finance Minister Slavko LINIC said on February 13th. Also stake in a local bank will be privatised, as the Government moves to slash the budget gap this year, according Reuters. The state controls some 80 percent in CROATIA Osiguranje and LINIC said the idea was to keep 25 percent plus one share and offer the remaining stock in a public tender. He did not elaborate on when the offer would take place, but according to other sources, the sale would probably happen this year.

According to the Finance Minister, the government hoped to get some two billion kuna (~EUR 265 million) from privatisation receipts this year. Most of that should come from CROATIA Osiguranje and HRVATSKA POSTANSKA BANKA (HPB), he said.

The budget gap was set at 2.8 percent of gross domestic product or 9.9 billion kuna, down from an expected 4.3 percent last year.

"Privatization is probably the only real way for the development of the leading Croatian insurer, but considering the enormous value of the CROATIA Osiguranje the whole process should be transparent and cautious", Zdravko ZRINUSIC, CEO of Croatia Insurance, said in a statement released by the RTL.

Although some trade unions, as well as some of the financial analists, have expressed serious objections on the sale, the Government seems to remain devoted to the idea and confident that there will be interested buyers.

CROATIA Osiguranje is the top leading company of the Croatian insurance market. In 2011, the company reported EUR 370.8 million in GWP, 5.5% less, in European currency, than in 2010. According to the company's statement, its consolidated gross profit jumped 34.6% to 160.2 million kuna (EUR 21.1 million) in 2011.

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