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. Last Updated: 07/27/2016

Ingosstrakh Addresses PPF's Concerns

LONDON -- Ingosstrakh, the country's No. 2 insurer, is seeking to ease a simmering dispute with a major shareholder, Prague-based PPF Investment, after first moving to dilute the Czech firm's stake fourfold.

Ingosstrakh will invite PPF Investment to buy shares in its upcoming secondary offering in order to prevent the dilution of PPF's stake from 38.5 percent to around 10 percent, chairman Vyacheslav Shcherbakov said.

"All shareholders, in accordance with the law, will be invited to take part in the share offering," Shcherbakov said late Monday.

At an extraordinary shareholders meeting on Oct. 8, when Shcherbakov was elected chairman, Ingosstrakh decided to quadruple its authorized capital from 2.5 billion rubles to 10 billion rubles ($403.2 million).

In order to maintain their stakes, all shareholders will therefore need to quadruple their investments in the company.

Media reported that the decision had been pushed through by another Ingosstrakh shareholder, metals billionaire Oleg Deripaska, who controls 60 percent of Ingosstrakh -- 10 percent directly and another 50 percent through his business holding, Basic Element.

PPF Investment stated earlier this month that the meeting was not transparent and that it was not given the option of buying into the increased capital of Ingosstrakh in order to maintain its stake.

PPF was not immediately available to comment Tuesday, but media have reported that it is planning legal action over the incident.