|
EBRD to acquire 10 percent stake in Russian insurer RESO Garantia
Pre-IPO funding represents Bank’s largest equity investment to date in Russia
The European Bank for Reconstruction and Development is undertaking to acquire
a stake of 10 percent in OSAO RESO Garantia, the country’s third largest
retail insurer, for the equivalent of at least $150 million as part of a
strategy to help prepare the company for an Initial Public Offering.
The final size of the EBRD investment will be subject to further adjustments,
depending on the price achieved by RESO Garantia and its shareholders in their
planned public stock market offering. The transaction represents the EBRD’s
largest equity deal in Russia and is the largest investment in the insurance
sector in the history of the Bank.
The price and other key parameters of the deal were agreed in 2006 based on
RESO Garantia’s 2005 IFRS results. As a result of this investment, the EBRD
will nominate its representative to the Board of RESO Garantia.
This is a landmark deal which sends an important signal of support for the
future of RESO Garantia and the whole Russian insurance market, said Kurt
Geiger, EBRD Business Group Director for Financial Institutions. We are proud
to become shareholders of a company that strives for transparency and good
corporate governance, Mr. Geiger added.
Sergey Sarkisov, founding shareholder and the Chairman of the Supervisory
Board of RESO Garantia said: “We welcome the EBRD as a strategic financial
partner for RESO that will contribute significantly to further development of
our business, in particular in the areas of strategy and corporate governance.
“We see the fact that the Bank’s investment in RESO is the largest in its
Russian equity portfolio as a vote of confidence in both RESO and the Russian
insurance market,” Mr. Sarkisov added.
The privately-owned company was founded in 1991 and serves over 3 million
retail clients. It was the third largest insurance group in Russia by gross
premiums in 2006 and has about 5,000 employees, most of them spread throughout
Russia’s regions. Its comprehensive distribution network, strong capital base
and integrated systems mark it out amongst its peers.
The EBRD’s equity investment is part of a move to complete a restructuring of
RESO Garantia’s operations and its capital base. The EBRD’s aim is to support
the group’s expansion of its core insurance activities and to help with the
continued growth of its operations across Russia.
The EBRD is holding its 16th Annual General Meeting in Kazan, capital of the
Russian Republic of Tatarstan, on May 20-21.
|
