NBA Announces Conditions on Sale of Its Re-Insurance Company of InterProtect Re AG
Azerbaijan, Baku / corr. Trend I.Khalilova / By the end of July the International Bank of Azerbaijan (IBA) plans to complete the agreement on sale of its International Insurance Company's daughter re-insurance company, InterProtect Re AG in Switzerland, said the Chairman of IBA Executive Board, Jahangir Hajiyev. According to him, the documents necessary for the sale of the company have been prepared. "The company will be purchased by the Switzerland company. It wishes to acquire InterProtect Re AG with premiums because the activity of the Company was beneficial," Hajiyev said. The gross amount of the agreement is $2.3 mln.
The decision to sell company was made due to the amendments to the legislation of Switzerland regarding increasing the capital and due to the demands of relevant Switzerland government regarding transformation of all captive companies (which accepts risks only from mother companies) into real re-insurance companies, and by the end of 2007, the Company should become a re-insurance company.
NBA needed to take such measures due to the limitations in the Azerbaijani legislation on increasing the capital of its daughter companies (the investments should not exceed 20% of the authorized capital of mother company).
The capital of the International Insurance Company does not allow increasing the capital of InterProtect Re AG and therefore, the decision was made to sell it.
Since 1 January, 2007 the authorized capital has been increased up to CHF 5mln (as of 7 May - 1 CHF equals AZN 0.7139). InterProtect Re AG was created two years ago, with authorized capital in the amount of CHF 1.2mln (nearly AZN 0.857mln).