Investment to support restructuring of financial sector
In support of further restructuring of the Greek financial sector, the European Bank for Reconstruction and Development (EBRD) has acquired a 15 per cent stake in the Greek insurance company European Reliance.
The stake is part of the 28.7 per cent previously held by Piraeus Bank and sold as part of the bank’s disposal of non-core assets in the implementation framework of its Restructuring Plan following the successful recapitalisation in December 2015. The remaining stake will be acquired by the insurer’s management (8.7 per cent) and the financial investors Orasis Fund SPC (2.5 per cent) and Serengeti Asset Management (2.5 per cent). European Reliance is a leading composite insurer and listed on the Athens Stock Exchange. In 2015, the insurer had total gross written premiums of €167 million and was among the top 10 insurance companies in Greece.
With this investment the EBRD is supporting the future development of European Reliance and facilitating the restructuring efforts of Piraeus Bank. The Greek insurance market is less advanced compared to other EU markets and the EBRD is therefore planning a long-term engagement with European Reliance.
Noel Edison, Director Financial Institutions, Insurance & Financial Services said: “This is an important step in the EBRD’s activities in Greece. Our investment will support a well-run local insurance company, contributing to greater competition in the market for the benefit of local customers. The EBRD will nominate an independent member on the Board of European Reliance to contribute to the development of the insurer’s corporate governance.”
Mr Christos Georgakopoulos, CEO of European Reliance, added: “The participation of the EBRD, a very important organisation, in the share capital of European Reliance, is a vote of confidence in the company’s growth prospects and its management. The company’s ‘dream’, as announced on 3 November 2015, for the fulfillment of its employees, customers, investors and management’s expectations, is a step closer.”
The EBRD started investing in Greece on a temporary basis in 2015 to support the country’s economic recovery. Strengthening the financial sector is crucial to restart lending to private businesses in order to regenerate growth. The Bank’s other focus is on supporting privatisation, infrastructure development and regional integration of the Greek economy.