Transneft to sell 98.9% stake in insurance subsidiary
MOSCOW. Aug 20 (Interfax) - Transneft is putting a 98.9% stake in CJSC Transneft Insurance Company up for sale, Transneft Vice President Mikhail Barkov told Interfax.
"Today's market situation makes this the best time to sell," Barkov said.
Transneft previously announced on its website plans to divest the insurance subsidiary in an open sale.
The Sogaz insurance group is one of the most serious contenders for the stake, a source familiar with talks on conducting a tender told Interfax. A source at Sogaz told Interfax earlier that the company was interested in acquiring the stake.
The company's insurance contracts with Transneft, which run until 2015, gives the company added appeal for potential investors, Interfax-CEO chief insurance specialist Anzhela Dolgopolova said.
Transneft Insurance Company had 8.3 billion rubles in premium income in 2012 (11.4% more than in 2011), making it the 20th biggest insurance company in Russia by that measure. It paid 3.9 billion rubles in benefits last year, for a loss ratio of 47%.
Transneft accounts for about 85% of the company's business, Dolgopolova said, meaning that the oil pipeline operator paid more than 7 billion rubles in premiums to Transneft Insurance Company in 2012. Most likely, the valuation of 100% of shares in Transneft Insurance Company will not be discounted from the annual premium. That is, 100% of shares might be offered at a price of 8 billion-8.5 billion rubles.
