Agreement on sale of 83.3 percent of DDOR Novi Sad signed
The Finance Minister Mirko Cvetkovic highlighted that socially owned capital in the DDOR Novi Sad insurance company and shares held by a number of minority shareholders were sold for 125 euros per share, which was eight times the nominal value of the shares. He added that the 1.9 percent ratio between the purchase price and gross computed premium was far more favorable than the regional 1.47 percent average. At the same time, the 4.1 percent purchase price/book value ratio was higher than the regional average of 3.3 percent.
Cvetkovic specified that the state held 36.96 of DDOR’s capital, and Republic of Serbia will consequently receive 97 million euros from the sale. Ten percent of that amount will be transferred to the Guarantees Fund, while 85 to 90 million euros will flow into the state budget, and half of the latter will be transferred to Vojvodina Autonomy. He added that after this sale, around two-thirds of insurance market in Serbia will be privately-owned.
President of the tender commission for sale of DDOR Slobodan Ilic underscored that the agreement should be executed within the next 60 days, after which DDOR’s Board will decide about distribution of free shares to its current and former employees and pensioners, who should receive around 373 euros for every year of employment. Some 6.5 percent of DDOR’s capital will be issued to current and former workers and pensioners, the same percentage will be transferred to Serbia’s Privatization Register, and the remainder of the shares belongs to small shareholders, who did not join the sale package.
According to Ilic, Fondiaria is required to present an offer to acquire the distributed shares and those held by small shareholders within the next 270 days and will be obligated to offer the same price per share that was paid for the majority package.
Marchionni underscored that acquisition of DDOR was one of the first steps in Fondiaria’s internationalization strategy. He said that premiums in Fondiaria – SAI rose by 21 percent over the past four years, and the company’s capitalization went up by 179 percent, while its overall asset value amounted to some 35 billion euros.
DDOR Novi Sad insurance company holds a 30 percent market share in Serbia. Its total capital in 2006 was estimated at 5.02 billion dinars, while its revenues totaled 15.09 billion dinars. DDOR has around 100 sale centers and 2,275 employees.
Fondiaria – SAI is the third-biggest insurance group in Italy, and was created in 2003 by merging of Fondiaria and SAI companies.