PZU

PZU [ Short Story ]

PZU is the largest Life and Non-Life insurer in Central Europe, with over 40% market share in its home market Poland.

In 1999 and subsequent years Eureko B.V. invested well over EUR 1 billion to acquire a stake of 33% in PZU The acquisition was based on the Polish government’s decision and promise to privatise PZU by an initial Public Offering (IPO) on the Warsaw Stock Exchange, by the end of 2001 at the latest.

However, as successive Polish governments refused to perform the privatisation agreement, Eureko decided to seek arbitration under the Dutch-Polish Bilateral Investment Treaty. In August 2005 the International Arbitration Tribunal issued a partial award strongly supporting Eureko’s claims against the Polish State. The second stage of the arbitration procedure, during which the Tribunal would determine damages and remedies, began in 2007 and proceeded steadily towards an anticipated positive outcome for Eureko. However, its eventual timing and exact results were uncertain.

Parallel to the arbitration procedure Eureko and the Polish State over the years made several efforts to negotiate an amicable settlement. On October 1, 2009 these efforts were successful. Eureko and the Polish Minister of State Treasury concluded a Settlement and Divestment Agreement.

The Agreement stipulated the payment of an interim dividend to Eureko by the end of November 2009. In return for renouncing other specific, previously acquired rights Eureko also was to receive financial compensation. Along with the interim dividend, the first part of this compensation was paid out on November 26, 2009. Following the agreed settlement and receipt of these monies, Eureko unconditionally withdrew its arbitration claim. The years to come (and possibly already 2010) will see the IPO of PZU on the Warsaw Stock Exchange. The IPO will enable Eureko to sell a substantial part of its PZU-shares. Following the IPO Eureko will gradually reduce its remaining shareholding in PZU.