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The Warsaw Voice » Business » October 14, 2009
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PZU Dispute Resolved With Eureko
October 14, 2009 By A.R.    
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64,816 foreign-owned companies were operating in Poland in the first half of this year, 1,612 more than a year earlier, according to the government's Central Statistical Office (GUS).

After a decade-long dispute, the government has struck a deal with Dutch company Eureko regarding Poland's largest insurance company PZU SA. Under the deal, the government will pay zl.4.77 billion in compensation to Eureko and will in return regain control over PZU.

The dispute between Eureko and the Treasury Ministry concerned a stake that the Dutch corporation acquired in PZU in 1999. Eureko argued that it had sustained immense losses as a result of the government's decision not to complete the process of privatizing PZU. Eureko had obtained guarantees that it could buy a further 21 percent of the stock in PZU in addition to shares it already owned and so acquire a majority interest in the insurance company.

The Treasury currently holds 55.09 percent of PZU, while Eureko has 33 percent minus one share. The remaining shareholders own a combined 12.8 percent of the stock. Eureko argued it had lost zl.35.6 billion as a result of the government's failure to privatize PZU, excluding costs of court proceedings and any due interest.

"Starting the negotiations, we set ourselves several strategic goals: to have the Treasury regain control over PZU and to bring about a situation in which Eureko would back out of the company in a controlled way," Treasury Minister Aleksander Grad said at a press conference Oct. 2. "The deal enables PZU to grow its business and allows the company to enter the stock exchange."

Under the agreement, Eureko will gradually withdraw from PZU. To begin with, 10 percent of the stock held by Eureko will be transferred to a special-purpose company controlled by the Treasury. The shares will then be sold in a public offering, together with a 4.9 percent stake held by the Treasury.

The compensation will be paid in two installments. The Treasury will first pay Eureko zl.3.55 billion by the end of the year, using funds from a PZU dividend payment. The other part, zl.1.22 billion, will come from the public offering.
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