GENERALI RELEASES THE PPF KNOB WITH KELLNER
GRECO PREPARES FOR THE RUSSIAN CAMPAIGN
Just over an hour and a half. It took so long, last night, because Generali's board of directors, meeting in extraordinary session, ratified the agreement with Petr Kellner, the Czech financier who is about to bid farewell to the company's board next spring.
Mario Greco will thus be able to present himself in London, at the investor day with the analysts, after having achieved at least three objectives: a) he has tackled and resolved the knot of relations with Kellner; b) carried out the expected landing in Prague without recourse to capital increases, a circumstance that weighed heavily on Leone's assessments; c) accelerates the road to expansion towards the Russian market, thanks to the strengthening in Ingosstrakh.
In summary, Leo, which today has 51% of the Generali Ppf insurance joint venture and has an option to acquire the remaining 49% from Kellner in 2014, anticipates the exercise of half of the stake and rises to 76% of the company which boasts interests in fifteen Eastern European countries. The remainder will instead be acquired at the end of 2014.
Il Leone will pay Kellner a sum of around 1,3 billion euros for the first tranche for the company which in the first six months of 2012 achieved an operating profit of 263 million thanks to the good performance of the non-life classes (+8,2, 24%). A similar figure will be turned over to Kellner for the remaining 2014% at the end of XNUMX.
These figures are in line with what was established at the time: the original option in fact provided for the exercise in July 2014 for a figure between 2,4 and 2,7 billion, while in the Ppf balance sheet the 49% share is estimated 2,65 .XNUMX billion.
For the payment of the first tranche, the company will rely on its own funds, including the liquidity raised with the recent issue of a 1,25 billion subordinated bond placed with institutional investors. For the second tranche, however, the capital should come from the already decided sale of the "non-core" assets, i.e. the Swiss BSI and the US reinsurance business.
The Czech financier, who reduced his stake in Leone from 2 to 0,65%, is likely to leave the company's board of directors at the renewal of the top management next spring. Also for this reason, the negotiation between Generali and the Prague group has extended to the other company that currently links the fate of the Lion with that of Kellner: the private equity fund Beta (51% in the hands of the Prague group, 49 % Generali) which has a 38,5% stake in the Russian company Ingostrakh, controlled by the Russian tycoon Oleg Deripaska who in the past has harshly opposed the aims of the Kellner-Generali partnership. But Deripaska, now heavily in debt, could be ready to review his intransigent position and open the doors to an industrial partner.
