Dutch investment company International Insurance Consortium (IIC) has reached an agreement to take over 100 percent of Carpatica Asig’s shares, according to a press release by the company.
Carpatica Asig is currently undergoing a financial recovery procedure and IIC said it intends to execute the transaction before the summer, depending on regulatory approval. The transaction is waiting for approval from the Authority for Financial Supervision (ASF).
“Carpatica has been in the news the last few months as a result of capital issues. I would like to emphasize that IIC intends to adequately capitalise the company, after receiving all the necessary approvals,” stated IIC managing director Jacob Westerlaken.
Wolf Theiss provided IIC with legal assistance in the acquisition of Carpatica Asig.
“Wolf Theiss likes challenges, and we have to admit that this transaction was one of them, from due diligence to contract signing under suspensive conditions. It is one of our atypical transactions, with a particular level of difficulty exacerbated by financial difficulties and certain branches of criminal law that had a direct or indirect influence on Carpatica Asig. All these explosive ingredients overlap with changes made to the whole legislative package in insurance in the last six months, with secondary legislation still pending. But we are fortunate to have a dynamic client, who appreciates all these difficulties and the challenge of making a success of Carpatica Asig,” said Ileana Glodeanu, partner with Wolf Theiss, part of the advising team.
Carpatica Asig’s daily gross written premiums rose 43 percent to RON 2.9 million in 2015, with claims paid by the insurer totaling RON 382 million, according to seenews.com.
The company’s cash flow was positive in 2015, amounting to RON 25 million. Carpatica estimates that it will rise to RON 103 million this year and further on to RON 174 million in 2017.
Carpatica, owned 93.97 percent by transport company Atlassib Sibiu, is the eighth biggest insurer in Romania according to ASF data. In January it opened its seventh subsidiary in Bucharest, hoping to boost business in Bucharest and to increase its corporate and retail client portfolio. It now operates a total of 63 subsidiaries and agencies across the country.
In September 2014, ASF approved a financial recovery plan for the general insurer Carpatica Asig aimed at helping the company achieve operating profit by balancing its portfolio and cutting costs.