ASF will draft a resolution plan in six months at most and an independent evaluator is going to make a fair, prudent and realistic assessment of the insurer’s assets, debts and equity, as a preliminary step towards applying the resolution measures.
Moreover, ASF designated the guarantee fund of the insured (FGA) as temporary administrator. The fund’s main attributions consist in supervising the inventory process of the company’s patrimony on December 31, 2015, drafting and auditing the annual financial reports, as well as supervising the way measures, mainly those aimed at attracting a strategic investor, are fulfilled. The company’s management will be obliged to consult the temporary administrator and obtain its approval before making any decision or taking any measures involving the company’s assets.
Carpatica Asig’s Executive Board is obliged to implement the measure aimed at attracting a strategic investor and concluding the transaction, as well as other measures, in order to re-establish the level of the basic eligible own funds that cover the minimum capital requirement (MCR) calculated on January 1, 2016 or to amend the risk profile so that MCR can be observed three months since announcing the decision.
Mid-January 2016, Carpatica Asig said it started the due diligence procedure by which the company will be financially, commercially and operationally assessed by the strategic investor interested in taking over the company.
“This process is based on the memorandum of understanding with exclusivity clause signed on December 21, 2015. The due diligence procedures follow a transaction calendar which was also sent to the Financial Supervisory Authority. The investor interested in taking over Carpatica Asig has vast experience in the insurance industry and plans to develop and consolidate the company over the long term,” Carpatica Asig said at that time in a statement.
Carpatica Asig, controlled by businessman Ilie Carabulea, signed on December 21 a memorandum of understanding with an exclusivity clause with a “European strategic investor” interested in taking over and developing the company.
Carpatica Asig, based in Sibiu, started a financial recovery plan approved by ASF in September 2014, and valid until the end of 2015 but failed to observe the deadlines, so that ASF expressed skepticism over the investor interested in the takeover. The company should have attracted a subordinated loan of minimum RON30 million and close a deal with a strategic investor by December 15.
The company’s shareholders include Atlassib Sibiu (92.77%) and Transcar Sibiu (6.64%), both held by Carabulea, as well as several private individuals (0.59%).
Carpatica Asig’s financial situation worsened after its owner and former general manager were placed under preventive arrest for corruption in January 2014.