Commercial Value SA, the insurance company at the centre of investigations by the Greek regulatory authorities, which led to the suspension of the titles of Aspis Pronia in Athens and Aspis Holdings and Leda Investments in Cyprus is confident that it will complete its EUR 90 mln capital shortfall by early September.
Aspis Holdings CEO Lambros Christophi told a press conference in Nicosia that the AGM notifications have already been sent, and following the consent of shareholders, the Group will proceed with the capital increase.
“I can tell you that the funds are there and the issue will be covered successfully,” Christophi said.
He said the decision of the Commission for the Supervision of Private Insurance (EPEIA) of the Hellenic Republic dated July 30, 2008 for the seizure of the assets of the insurance companies Commercial Value SA, Aspis Pronoia AEGA and Aspis Pronoia AEAZ that resulted in the temporary suspension of trading of the titles of Aspis Pronoia AEGA on the Athens Stock Exchange does not affect the activities of Aspis Holdings Public Company Ltd.
“On the contrary, the Greek companies depend on us. So I cannot understand why two days after the event became public, the authorities in Cyprus decided to suspend the titles of ASP and Leda Investments,” said Christophi.
The only negative factor is that Chairman of the Group Pavlos Psomiades, who is also the majority shareholder of ASP may not finance new capital increases.
Capital adequacy
Christophi attributed the EPEIA’s decision to technical reasons of determination of whether the land and real estate holdings are valued on fair value or on market value. After CV decided to absorb the operations of Proton Insurance, it became the subject of scrutiny and it was deemed by the regulators that it has a surplus of EUR 62 mln but if real estate assets are marked to fair value, a difference of EUR 74 mln arises.
“This also includes a hit that the investment portfolio of CV took from the decline in global equity prices, that cost EUR 24 mln.”
He said until now, it was widely accepted that insurers could follow IAS rules and value their real estate holdings on market value after getting independent valuations. Apparently, now the rules have been changed and CV was the first to be scrutinised carefully.
“We shall do the capital increase to cover the need for EUR 88 mln in capital, and this will be done as soon as possible,” said Christophi.
The capital increase of Commercial Value SA will strengthen its capital base to EUR160 mln, becoming the third best capitalised company in Greece behind Ethniki (EUR 175m) and Interamerican (EUR165m).
