The Polish government and Dutch-based EUREKO reached an agreement in
early October, ending an eight-year dispute over PZU SA and clearing
the way for a share sale by the country's top insurer.
The agreement
guarantees to Dutch insurer USD 4.33 billion in dividends, compensation
for damages and proceeds from cutting its 33% stake in
PZU to 18%. This accord secures EUREKO's "controlled exit" from
the insurer, whose value after the dividend payout is about EUR 6 billons.
By
the end of this year, Poland will pay EUREKO USD 1.2 billion in compensation.
In order to facilitate the negotiations, in May this
year, EUREKO suspended the arbitration, in which it was demanding EUR
8.5 million.
Treasury Minister, Aleksander GRAD, said Poland and EUREKO
aim to sell 20% of PZU in an IPO on the Warsaw Stock Exchange next
year.
EUREKO
will transfer a 10 percent stake in the PZU to a SPV controlled by
Poland's treasury. Those shares, along with another 5 percent
held by EUREKO and 4.9 percent owned by Poland, will be sold in the
IPO.
Under the agreement EUREKO will reduce its PZU stake to less than
13 percent, and not to increase its holding above this level for 15
years.
EUREKO and the Polish government have struggled for control of
the insurer since the Dutch company bought a 30 percent stake in 1999.
EUREKO sued the government for breaking a pledge to sell a further
21 percent and won international arbitration in 2005. Poland holds
55 percent in PZU.
