Treasury announces resumption of Eureko-PZU negotiations

Yesterday the Treasury announced it is returning to negotiations with PZU's minority shareholder, the consortium of pan-European insurer Eureko and Polish BIG BG with a joint 30% stake in PZU. The resumption of talks takes place directly after the replacement of former Treasury Minister Andrzej Chronowski, who actually caused the imbroglio in PZU, by Aldona Kamela Sowinska, who has indicated she is willing to reach a compromise. Both parties have decided not to comment on the talks before a solution is reached, and analysts have suggested that the talks could bring surprising results. It is possible that the Treasury will sell the consortium a further 21% of stock, thus assuring it full control over PZU. In that case at least zl. 2.5 billion would be paid to the state budget. Another scenario is that the negotiating parties would focus on issues of management power relations, facilitating in that way PZU’s entrance on the Warsaw Stock Exchange (WSE). According to the privatization agreement in effect, both parties can have four representatives on the nine-person supervisory board, with the chairman selected by mutual agreement; currently the consortium has no representatives on the board. Minister Sowinska is most likely to return Eureko and BIG BG to power within PZU, enabling the largest Polish insurer to enter WSE as early as this year. (Gazeta Wyborcza, p.22, Reuters). M.T.