Eureko says yes, parliament no
The plan envisages Poland selling PZU shares through an initial public offering (IPO) in May or June of 2005, with neither the state nor Eureko gaining a majority stake in the company. The Dutch insurer has signaled its willingness to accept these terms.
"We have not yet signed an agreement, but I am cautiously optimistic," Eureko spokeswoman Lorrie Morgan said.
The compromise could resolve a months-long privatization-scheme scuffle, which had severely damaged Poland's image among investors. In 1999, Poland promised to sell a controlling share to Eureko, which holds 31 percent of PZU along with Polish bank Millennium, but later went back on its word.
According to the proposal, Eureko would buy an additional five-percent stake from the government during the IPO, and the European Bank for Reconstruction and Development, which many see as a neutral party and a guardian of corporate governance, would also take five percent. The government would keep 25 percent plus one share, and would also have first refusal if Eureko sells PZU shares.
"This would give the treasury a blocking minority on strategic issues after the statute is changed," Socha said.
Employees and investment funds already own some 14 percent of the insurer, which means that approximately 20 percent of the shares will be left to sell to the public.
After the IPO, Eureko would be allowed to buy more PZU shares, but would need the government's approval to purchase a controlling stake.
Recently, however, the agreement suffered a setback, with parliament debating a motion calling on the government to reject the deal. If the motion is approved, Socha has said he will recommend the government not sign the agreement.
(Reuters)
"We have not yet signed an agreement, but I am cautiously optimistic," Eureko spokeswoman Lorrie Morgan said.
The compromise could resolve a months-long privatization-scheme scuffle, which had severely damaged Poland's image among investors. In 1999, Poland promised to sell a controlling share to Eureko, which holds 31 percent of PZU along with Polish bank Millennium, but later went back on its word.
According to the proposal, Eureko would buy an additional five-percent stake from the government during the IPO, and the European Bank for Reconstruction and Development, which many see as a neutral party and a guardian of corporate governance, would also take five percent. The government would keep 25 percent plus one share, and would also have first refusal if Eureko sells PZU shares.
"This would give the treasury a blocking minority on strategic issues after the statute is changed," Socha said.
Employees and investment funds already own some 14 percent of the insurer, which means that approximately 20 percent of the shares will be left to sell to the public.
After the IPO, Eureko would be allowed to buy more PZU shares, but would need the government's approval to purchase a controlling stake.
Recently, however, the agreement suffered a setback, with parliament debating a motion calling on the government to reject the deal. If the motion is approved, Socha has said he will recommend the government not sign the agreement.
(Reuters)
