In the Ministry, Silence on the Response to the Sale of CO and HPB

The deadline for submitting non-binding offers for the sale and recapitalization of Croatia osiguranje (CO) and Hrvatska poštanska banka (HPB) expires today, and the Ministry of Finance does not wish to disclose data on the response at this time.

The Ministry interprets its restraint as a reflection of the specifics of the privatization of CO and HPB and the limitations imposed by the Capital Market Act.

They announce that in about ten days they will inform the Government about the received non-binding offers and emphasize that they do not want to open a discussion on the success or failure and the justification of privatization until binding offers arrive, which will provide the best answers to those questions.

Prime Minister Zoran Milanović stated yesterday that the interest in Croatia osiguranje and Hrvatska poštanska banka is significant and that they will be sold to whoever offers the most and the best.

In the Ministry of Finance, they say that at the stage of non-binding offers, they do not want to debate whether three bidders for HPB or 11 or 12 offers for CO represent success or failure, and that the discussion can be opened when binding offers arrive.

The Government announced at the beginning of August that it would issue tenders for expressing interest and collecting non-binding offers for acquiring shares of HPB and Croatia osiguranje, with the deadline for expressing interest having expired on August 31, and the deadline for non-binding offers expiring today.

After the expiration of the interest expression deadline, the media speculated that about ten companies expressed interest in Croatia osiguranje, mentioning the Adris Group, Polish PZU, Slovenian Triglav, as well as the leading American insurance company AIG, Austrian VIG and Grawe, and the European Bank for Reconstruction and Development, etc., while some domestic banks, including Erste Bank and OTP Bank, were mentioned as interested parties for HPB.

In mid-July, the Government decided to sell part of its total 80.2 percent ownership stake in Croatia osiguranje, ensuring that after the completion of the transaction, at least 25 percent plus one share, or a maximum of 30 percent of the shares of the capital-enhanced CO, remains in state ownership.

In the call for expressing interest, it was also stated that investors must meet conditions in accordance with EU and Croatian laws, as the acquisition of CO shares is subject to certain regulatory approvals, meaning that certain investors may be excluded from participating in the planned transaction as a result of such regulations.

The financial advisor in the process of Croatia osiguranje is KPMG Croatia d.o.o.

Croatia osiguranje (CO) achieved a gross profit of 71.1 million kuna in the first six months of this year, which is 9.7 percent higher compared to the same period last year.

By the end of June this year, the total written premium of Croatia osiguranje reached 1.6 billion kuna, achieving 61.4 percent of the annual plan.

The total revenue of Croatia osiguranje in the first half of this year amounted to 1.27 billion kuna, which is a decrease of 3.6 percent compared to the same period last year.

On July 18, the Government also decided to offer potential strategic investors in HPB 871,142 shares of that bank, or 99.13 percent of the shares.

HPB achieved a net profit of 61.4 million kuna in the first half of the year, representing a slight increase compared to the same period last year when a profit of 61 million kuna was recorded. HPB is the seventh largest bank in Croatia by total assets, which amounted to 17.8 billion kuna at the end of June, having increased by 701.8 million kuna, or 4 percent during the first six months of this year.

The financial advisor in the process of its privatization is Confida-Revizija.