German investment fund Berlin London Beteiligungs AG (BLH), which is interested to take over the local insurer City Insurance, sent to the Financial Supervisory Authority (ASF) its exact plans for acquiring the company and also sent a financial offer to the current majority owner Dan Odobescu, reports local Profit.ro.
The fund agreed to grant a subordinated loan of maximum EUR 30 million to Vivendi International, the company that owns a majority stake in City Insurance.
The takeover will be done by providing the subordinated loan simultaneously with acquiring the Vivendi International stake. This loan would be secured with a claim that City Insurance holds on to another company in the group, City Invest.
The former general director Nicolae Musat would continue to head the insurer after the transaction is completed. ASF is quite open about the BLH offer, according to sources.
City Insurance needs a capital injection of at least RON 180 million (EUR 40 million) to respect the solvency II capital requirements. It also needs to recover debts from its affiliates.
ASF kicked off the insurer’s financial recovery procedure on April 18, last year. City Insurance is currently one of the top insurers in the mandatory car insurance segment (RCA) in Romania.