The Croatian government decided at its session on Thursday to sell its shares in the postal bank Hrvatska Postanska Banka (HPB) and the insurance company Croatia Osiguranje (CO).
Privatisation tenders are likely to be called already this month to last until mid-September, after which the government would consider the bids.
On sale are 871,142 shares in HPB, at a nominal value of HRK 1,100 per share. The total nominal value of the shares is HRK 958.2 million, accounting for 99.13% of the bank's equity.
Finance Minister Slavko Linic said that the purpose of the sale was to ensure growth and development of the bank, which now controls eight per cent of the domestic banking market, as this could not be done through the budget any more. He said that the government had considered several models of sale and had decided to sell its entire stake because in that way it hoped to achieve a better price.
As regards Croatia Osiguranje, the government decided to sell up to 50% of its 82.48% stake in the company and to ensure recapitalisation through a new issue of shares. The nominal value of the bank's total equity is HRK 442.9 million.
Linic said that the privatisation and recapitalisation of CO should be carried out in such a way that after the completion of this process no more than 30% of shares and no less than 25% plus one share remained in the government's ownership.
Linic said that by selling its stake the government aimed to strengthen CO so that it could increase its share of the life insurance market and retain its share of property insurance and car insurance, while the purpose of recapitalisation was to strengthen the company's position in the region.
One of the objectives of the government in both cases is to secure additional budget revenues to reduce the deficit and public debt, the minister said.
