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. Last Updated: 07/27/2016

Troika Buys 9% Stake in State Insurer For $6.8M

The State Property Ministry on Friday said that a sale of stakes in state-owned insurance company Rosgosstrakh had got off to a good start with the sale of a 9 percent holding. Natalya Starodumova, spokeswoman for the ministry, said Troika Dialog investment bank had bought the stake for 201 million rubles ($6.83 million).

Further auctions will follow this year.

Troika Dialog declined to comment on its plans, but Interfax news agency quoted an industry source as saying the investment bank had bought the stake for a client.

Rosgosstrakh is a household name in Russia, being the only insurer in the Soviet era allowed to service the retail market.

"Today's sale was a success. We were right with the starting price," Vladimir Malin, chairman of the State Property Fund, told a news conference.

The starting price was 153 million rubles.

The company is the only state-owned insurer and in 2000 collected premiums of 3.88 billion rubles ($131.8 million), up 122.3 percent on 1999. Payouts rose 4.2 percent to 1.34 billion rubles.

"The fact that the final price exceeded the starting price by 30 percent is a result of openness and transparency, which accompanied each stage of the sale," said First Deputy Property Minister Alexander Braverman.

The other four bidders -- Lornaka, Kobra-Kapital, Ansilas and Auditaviatrust -- are little-known Russian firms. Troika's investment-banking head, Oleg Tsarkov, said the bank was considering participating in the future auctions.

Friday's sale was the first of three offers planned to leave the state with 50 percent plus one share in the insurer. Braverman said the date and terms of a second auction, where 16 percent plus one share will be offered, would be given next week. At the third sale, tentatively set for early November, the government is to offer 25 percent minus two shares.

The three-stage plan is designed to prevent any bidder obtaining a blocking stake before the third auction, forcing contenders to pay as much as possible for Rosgosstrakh's 2,500 branches, its main attraction.

"We want the fight to continue to the very end, so that there is competitiveness, because competitiveness raises the price and budget revenues, and increasing budget revenues is one of our chief goals," Braverman said.

Of rival insurance companies, Rosno, 45 percent owned by Germany's Allianz, has expressed an interest in either a blocking stake or all the Rosgosstrakh shares on offer.

Interros-Solgalsiye, an insurance company for one of Russia's most powerful industrial and financial groups, Interros, and another financial group, Alfa Group, have also said they are considering taking part in the auctions.

Braverman said Rosgosstrakh's board would soon consider changes to the company charter to protect minority shareholders, whose interests are often neglected by Russian firms.

Rossgosstrakh's management has also said it needs a partner who could bring investment to improve the company's information flows, develop new products and train personnel.