UPDATE 1 - Eurohold moves to protect interests of shareholders, creditors

"Along with in-house experts, the company has engaged a solid team of external consultants with diverse expertise and will continue efforts to finalize the case in Romania in accordance with European law," Eurohold said in a statement.

"The management and the main shareholders of Eurohold are confident that the actions taken will ensure the financial stability of the company. All subsidiaries of the holding are operating normally," it added.

The company also said that in the latest reporting period (as of September 2022), Eurohold posted the best consolidated results in its history due to strong performance of both the group's insurance and energy businesses. "

The expectations are that this upward trend will continue in the coming quarters. Trading in financial instruments of the company on the Bulgarian and Warsaw Stock Exchanges will continue in the usual market rhythm," the company noted.

"Eurohold’s management is grateful to all the competent state authorities and responsible European institutions that responded and took action after the company reported an organised attack against Euroins Romania. The company's management has the support of all its major and key minority shareholders, including the European Bank for Reconstruction and Development (EBRD)," Eurohold added.

Euroins Romania, the largest insurer on the Romanian market, is the target of a hostile takeover attempt, which could result in a liquidity crisis and destabilise the market, its Bulgarian parent said over the weekend.

"The attack against Euroins Romania might involve a number of senior and mid-level management employees of the insurance department of the supervision authority of the Romanian financial regulator - the Financial Supervisory Authority (ASF), as well as people involved in the City Insurance crisis," Eurohold Bulgaria said in a press release on Saturday.

In 2021, City Insurance, Romania's largest insurer at the time, went bankrupt.

"The attack on Euroins Romania escalated in the last two weeks when a massive negative campaign was organised through media, some politicians and some Insurance department officials of ASF. It includes actions and measures that are in blatant violation not only of the national, but also of the European legislation," Eurohold Bulgaria added.

"The information provided by the company to the relevant state and international institutions describes all the intentional actions of the group against Euroins Romania and the potential aim of the campaign that might consist in a quick seizure of the assets of the insurer, causing a liquidity crisis in the sector of major impact," Eurohold also said in its statement.

By Monday morning, ASF had not issued an official statement on Eurohold's claims. A SeeNews email to the regulator seeking comment went unanswered by the time this article was published.

Last month, ASF said that it fined insurance company Euroins Romania with 309,400 lei ($67,459/63,185 euro) in December for violating regulations regarding compensation claims and payments. ASF fined Euroins Romania for failing to submit to customers compensation offers or notifications regarding the reasons for which the compensation claims had not been approved, as well as for the delayed payment of damages and failure to pay penalties incurred due to delays or partial payments, the financial regulator said at the time.

At the end of September 2022, Euroins Romania held a 31% market share, leading the list of largest insurers in the country, according to ASF data.

Euroins Romania is part of Bulgaria’s Euroins Insurance Group (EIG), which is a unit of Eurohold Bulgaria. At the end of 2022, the Financial Supervision Commission in Bulgaria approved the acquisition of a minority stake in EIG by the European Bank for Reconstruction and Deelopment (EBRD). The transaction was preceded by a detailed and complete audit of the financial position of the insurance group and its subsidiaries, including Euroins Romania.

Eurohold Bulgaria is a leading energy and financial group operating in Central, Eastern and Southeastern Europe. It is listed on the Bulgarian and Warsaw Stock Exchange. Eurohold owns Euroins Insurance Group (EIG), one of the largest insurance groups in the region. EIG provides a full range of insurance products, serves over 4 million customers in 11 countries and has over 3,000 employees.

($ = 4.5865 Romanian leu)