Report No IPO for Poland’s PZU before May 2004

June 18, 2003

The long-delayed initial public offering of shares in Poland’s largest insurer, Powszechny Zaklad Ubezpieczen SA (PZU) has now been put off once again – until May 2004 at the earliest.

According to a report from Dow Jones Newswires, PZU’s newly installed president Cezary Stypulkowski, who took over management of the insurer late last month, told journalists that his first priority was to find a solution to the dispute between the Polish State Treasury, which owns 55 percent of PZU and the Eureko Consortium, which acquired a 30 percent stake in 1999. Part of that deal provided for the public offering, and in addition that Eureko would have control of PZU’s management. Both provisions have caused problems, and the situation, along with the decline in global equity markets that began in 2001, has repeatedly delayed the anticipated public offering of the company’s shares.

Stypulkowski, 46, the former Chairman of Bank Handlowy, which was recently purchased by Citicorp, has a good reputation in the Polish financial community. He indicated that no sale could proceed as long as the two largest shareholders were locked in a dispute. The international arbitration court in Stockholm is currently considering Eureko’s complaint.

As no decision is likely before next year, Stypulkowski will have the time to try and reach a compromise agreeable to all parties, and can also concentrate on protecting PZU’s dominant market share. It still sells between 55 and 60 percent of all Polish insurance policies in both life and P/C, but has seen that dominance decline in recent years, as Poland grows closer to joining the European Union.

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