KPMG says Astra needs EUR 110 mln in fresh capital over one year

Newsroom 08/04/2014 | 19:26

Romanian insurer Astra needs to raise around EUR 110 million in new capital to improve its prudential indicators, according to a recovery plan drawn up by its special administrator KPMG Advisory that was approved by the Financial Supervision Authority (ASF) on Monday.

Astra’s share capital will have to be hiked by EUR 15.7 million and further increases will have to be carried out over the course of one year.

“The approval of the plan of measures by ASF is an important step in the recovery of the company. In the next stage, all parties need to contribute to the successful implementation of this project. For this we rely on the support of shareholders in backing the recapitalization efforts of the companies and on that of employees and collaborators of Astra to ensure the continuation of the activity,” said KPMG Advisory in a statement.

KPMG has recommended the closing of a handful of litigation cases and the recovery of some loans granted by Astra that reached maturity. Furthermore, the company should move some of the risk associated with the natural disasters insurance arm to reinsurers with a strong rating.

The administrator has also suggested the roll out of measures designed to improve Astra’s corporate governance so as to make the business sustainable on the long term.