At the beginning of May, at the Government’s ProInvest, Finance Minister Slavko Linić promised that by the end of that month, the models for the privatization of HPB and Croatia osiguranje would certainly be known so that the budget could be filled with planned capital revenues in the autumn.
Two and a half months later, the models are still unknown, speculation surrounds the buyers, as well as the price and shares, and, interestingly, there is little discussion or writing about it. However, the delay in defining the sales model in recent days has fueled various information and theses circulating among interested financial and political circles in an attempt to clear the fog surrounding the entire matter. A source from financial-investment circles close to the government says that the state is likely abandoning the privatization of Croatia osiguranje!
Forever or just temporarily tactically? It is unknown. The level of conspiracy and silence surrounding the sale of that company can only be measured against the secrecy of the bombastic resignation of Sanader. Exactly one month ago, just before the ‘situation’ with the sales advisor (the Consortium of Bidders KPMG and Wolf Theiss), which had been unable to complete the financial review, stories briefly circulated that CO was being kept for the domestic Adris. To discourage the Polish buyer, the largest insurer PZU, who had shown serious interest, Milanović’s government decided to sell only a minority stake. It is known that the Poles want a majority package, so the government hoped that PZU would throw in the towel and return home empty-handed. The timing of the complaints from the CEO of CO, Krešimir Starčević, that they need additional capital for a ‘step into the region’ was also suspicious. A manager publicly crying out for capital in the midst of a privatization process? That Milanović could indeed abandon privatization and that the information held by the financiers is not without basis is confirmed by a high-ranking source from the ruling coalition. He tells us that the problem lies in the price. It is a public secret that CO is being kept for Adris, but Adris would gladly expand its insurance business at the lowest possible price. Such a desire poorly coincides with the desperate state of the state budget, which desperately needs more, not less. If Adris withdraws its offer, only the Poles will remain in the race, and when they realize they are the only ones, it is almost certain they will also lower the price. After all, Adris has been mentioned countless times in numerous buy-sell transactions, but has never endured the battle to the end – it has never bought anything in the privatization process.
The government refers to a statement issued back in mid-May that ‘at the current stage of the process, they are unable to provide any information as it concerns confidential data.’ Adris responds with a statement that says nothing: ‘Adris Group stands by its previous statements. We are interested in investments in insurance businesses both in our country and in the region.’
Dominika Zbychorska, Director of Mergers and Acquisitions at Polish PZU, briefly responds that they remain interested in investing in Croatia and participating in the privatization of CO whenever the government makes a formal decision regarding the privatization process, but she did not wish to comment on the information regarding a possible halt to the privatization.
– PZU will submit an offer and tender documentation in accordance with the government’s invitation, as we believe that our experience can bring a new development cycle and new added value to the Croatian insurer – states the response.
