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Poland, Eureko continue last minute talks on PZU

Published 10/01/2009, 08:54 AM
Updated 10/01/2009, 08:57 AM

WARSAW, Oct 1 (Reuters) - Poland's largest insurer group, PZU, twice delayed the resumption of a shareholders meeting on Thursday as the Polish government and Eureko continue last minutes negotiations to settle a decade-old ownership row.

The gathering, suspended a week ago, was to restart at 1000 GMT, but the opening was delayed twice to 1330 GMT.

"Discussions are continuing," a treasury spokesman said.

Poland's reputation among foreign investors was stained after it backed out of a commitment to give up a controlling stake of eastern Europe's top insurance group.

The shareholders are expected to vote for a dividend payout of as much as 12 billion zlotys ($4.1 billion) that would be the centrepiece of any settlement.

Polish newspapers have speculated that Eureko would receive up to 10 billion zlotys, mainly from PZU's coffers, to drop its arbitration case against Poland and would sell its 33-percent stake in an initial public offering early next year.

PZU, in which Poland holds a 55 percent stake, is valued at some 36 billion zlotys.

Concerns that Eureko would convert the payout into euros, flooding the market with the Polish currency, have helped to drive the zloty to its lowest level in two months. (Reporting by Adrian Krajewski and Piotr Bujnicki, writing by Chris Borowski; editing by Elaine Hardcastle)

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