March 17 (SeeNews) - Energy and insurance conglomerate Eurohold Bulgaria [BUL:EUBG] said on Friday that it will appeal a decision by the Romanian financial supervisor to revoke the operating licence of its subsidiary Euroins Romania and request the launch of bankruptcy proceedings.
Eurohold Bulgaria will challenge the supervisor's decision in all competent courts in Europe and around the world, the holding company said in a filing to the Bulgarian Stock Exchange.
Eurohold also noted that all other subsidiaries and businesses of Eurohold are stable and continue to operate as usual and without any problems.
Earlier on Friday, Romania's financial regulator ASF said that it withdrew the operating licence of Euroins Romania Asigurare-Reasigurare, part of Bulgaria’s Euroins Insurance Group (EIG), and decided to file a court request for the launch of bankruptcy proceedings. ASF also appointed the Policyholders Guarantee Fund (FGA) as an interim administrator of Euroins Romania.
To cover an existing solvency capital requirement gap, Euroins Romania will need to provide 2.19 billion lei ($472.8 million/444.9 million euro), according to the regulator.
In a separate statement, Bulgaria's financial supervision authority said that Euroins Romania Asigurare-Reasigurare has no insurance operations in Bulgaria and that no issues have been found with the solvency of the individual companies within the EIG, or the group as a whole.
Last month, Eurohold Bulgaria said that it took further steps to guarantee the solvency of Euroins Romania so as to shield it from what it describes as "regulatory overpressure".
Euroins Romania signed a quota share reinsurance agreement with EIG Re, the reinsurance arm of EIG, thus addressing all remarks made by the Romanian insurance supervision authority, Eurohold Bulgaria said at the time.
The deal provides a higher coverage of Euroins Romania's minimum capital requirement and solvency capital requirement - the two key indicators of an insurer's stability and solvency, Eurohold said at the time. It covers the full amount of insurance claims of the Romanian company and resolves all outstanding issues constituting the dispute with the insurance supervisory authority in Romania, the group added.
The move came after a week earlier Eurohold said that Euroins Romania was the target of a hostile takeover attempt.
Eurohold Bulgaria is a leading energy and financial services group active in Central, Eastern and Southeastern Europe. It is listed on the Bulgarian and Warsaw Stock Exchange. EIG provides a full range of insurance products, serves over 4 million customers in 11 countries and has over 3,000 employees.
Euroins Romania holds a 25% share of the local insurance market, company officials told a news conference on Friday.
In early February, ASF approved the acquisition of a minority stake in EIG by the European Bank for Reconstruction and Development (EBRD).
(1 euro=4.91972 lei)
Euroins Romania Asigurare Reasigurare SA is among the biggest insurers in SEE, for more reference take a look at Top 100 insurers