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Eureko focuses on arbitration after collapse of negotiations on insurer PZU

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Date: 2008-06-30 08:00

After the state treasury and the Netherlands-based concern Eureko fruitlessly wound up their negotiations on privatisation of Poland ’s biggest insurer PZU, Eureko declared it hoped to complete the arbitration procedures in one- one and a half years.


Eureko Polska’s CEO Michal Nastula stressed that the more advanced the arbitration, the more difficult it would be to return to compromise-seeking talks. The negotiations finished on Thursday (Jun 26), in line with the schedule set forth in the February negotiating memorandum. Currently, the sides will be represented by investment banks - Lehman Brothers acting on the behalf of the state and JP Morgan - on the behalf of Eureko, but without the mandate to negotiate by the end of September. Nastula stressed that if they found no new ways to seek compromise, the arbitration would be the only solution.

Eureko demands the full implementation of the 1999 privatisation agreement and the 2001 appendix, which gave it the right to the majority stake in PZU - now the concern holds 33% minus 1 share. In 2005, the arbitration tribunal in London ruled that the control over PZU should belong to Eureko and is now in the process of establishing damages for the Dutch concern - treasury minister Aleksander Grad earlier said that the sum in question was PLN 35.6bn (EUR 10.5bn).

ISB, tom