PZU to move ahead with IPO

PZU plans to move as quickly as possible toward its initial public offering (IPO.
By : Jeffrey Sparshott

   Despite controversy surrounding a former top executive and weak market conditions, dominant Polish insurer Powszechny Zaklad Ubezpieczen (PZU) (http://www.pzu.pl) plans to move as quickly as possible toward its initial public offering (IPO), possibly beginning trade this year, the company said last week.

   "We are working for the IPO this autumn," said PZU Spokesman Adam Taukert. "We are working with that plan and the situation has not changed."

   Grzegorz Wieczerzak, former head of PZU's life insurance group PZU Zycie, was arrested earlier this month as the alleged architect of a loan fraud scheme. He was freed on zl. 300,000 bail and told not to leave the country while prosecutors investigate what they believe may be Poland's biggest fraud since the fall of communism in 1989, Reuters reported.

   While the arrest has clouded the company's launch into equity markets and the Warsaw Stock Exchange (WSE) hit 30-month lows last week, PZU officials remain optimistic about the company's prospects as a publicly traded firm. The treasury, which is now the majority owner, plans to let strategic investors Eureko and BIG Bank Gdanski (BIG-BG) take a majority stake when it floats 50% of the company during the IPO. Netherlands-based Eureko and Polish BIG-BG bought a 30% of PZU in 1999.

   The insurance giant is also looking outside Poland, confirming last week that it is vying for a stake in Slovenska PoistŠovnŠa, Slovakia's state-owned insurance company. In previous interviews, Kostkiewicz said the firm is also interested in Lithuanian and other neighboring markets.

   PZU last week reported a consolidated net profit of zl. 730 million ($173 million) in 2000, more than 60% above the previous year.