The Netherlands-based Eureko consortium, apparently frustrated by the Polish government’s continued delays in implementing the agreement to sell a controlling interest in Poland’s largest insurer Powszechny Zaklad Ubezpieczen (PZU) (See IJ Website Feb.7), has formally requested that the matter be negotiated between the Dutch and Polish governments.
In letters sent last week to Wim Kok and Leszek Miller, the respective Prime Ministers of each country, Eureko asked for talks to be initiated under a bilateral agreement, which provides protection to international investors. If no agreement is reached within six months, the matter would go to international arbitration in Stockholm, Sweden.
At the heart of the dispute is the Polish Treasury’s reluctance to bring an initial public offering to the market, which would enable Eureko to acquire an additional 21 percent of PZU. Added to the 30 percent it bought in 1999, this would give it, and its Polish partner, BIG Bank Gdanski, control of PZU’s board, and the ability to make needed reforms in the company’s operations.
The IPO, originally scheduled for last fall, was delayed following the attacks on the WTC, which depressed global equity markets. It had been expected to take place in early 2002, but recent statements from the Treasury Minister have indicated it might be delayed until next year, and have effectively cast doubt on whether Poland’s present government, which took over last fall, really intends to abide by the terms of the compromise agreement negotiated last year.
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