Warsaw (Puls Biznesu) – PZU has a difficult choice to make. The biggest Polish insurer may either sell its foreign subsidiaries or spend additional PLN 200-300m to make them profitable.
PZU hoped that its foreign subsidies would generate 8 percent of sales in 2010, or PLN 1 billion (EUR 251m). The biggest insurance company in Poland has so far spent PLN 200m for acquisitions. In 2005, it bought Ukrainian Skide-West insurance group for PLN 35.8m and raised its capital by PLN 39.4m. So far, PZU has lost PLN 27.3m on this project. A special team has recently checked the company.
“The Ukrainian companies need strong strengthening as far as people and managers are concerned. If we are to stay there, we need to raise the capital”, Piotr Osiecki, the new chairman of PZU Ukraine and PZU Ukraine Life Insurance supervisory boards said.
He refused to say how much PZU would have to invest. According to unofficial sources, the necessary funds amount to PLN 100-150m.
In Lithuania, PZU has spent PLN 119.6m so far. Its Lithuanian subsidiaries had PLN 67.2m of loss at the end of last year. According to “Puls Biznesu” sources, PZU would have to invest PLN 50-100m in the country.
(PLN 1 = EUR 0.251)