PRIVATISATION: Government to Privatise Croatian Postal Bank and Croatia Insurance

On Thursday, the government made a decision to sell a majority stakes in the Croatian Postal Bank (HPB) and the insurance company Croatia Insurance (CO), but said both companies would require capital injections by whoever buys the assets.

In June 2012, the Government Cabinet decided to make the Ministry of Finance responsible for implementing the privatisation of HPB and CO. The decision also instructed the Ministry to issue an international tender for advisory services to analyse and prepare for the privatisation of both companies. The Finance Ministry chose the bid by consultant companies KPMG and Wolf Theiss Zagreb, regarding the privatisation of CO (their financial offer was valued at €3.9 million).  HPB’s advisors are the bidding group Confida-Revizija (Zagreb), Confida Klagenfurt, Schonherr Rechtsanwalte (Vienna), and CD Invest Consult (Vienna.)

HPB is the last major state-owned bank, which currently controls 8% of the domestic banking market. The government decided to sell 871,142 shares of HPB, accounting for 99.13% of the bank’s equity. The total nominal value of the shares is €127.4 million. The privatisation process will be completed in two phases. First, the government will select eligible bidders. Second, the selected bidders will have an opportunity to enter the data room and submit their binding offers.

Regarding CO, the government will sell up to 50% of its 80.23% stake in the company and ensure recapitalisation through a new issue of shares, hence, enabling the investor to become a majority shareholder in due course. The nominal value of the bank’s total equity is €58.9 million. After the process is completed, no more than 30% of shares and no less than 25% plus one share will remain under state ownership, explained Finance Minister Slavko Linic (SDP).

Privatisation tenders are expected to be called by the end of July 2103 and last until mid-September, after which the Finance Ministry and the government will evaluate the bids.  In both cases, Linic said that one of the objectives of the government is to secure additional budget revenue to reduce the deficit and public debt…

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