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11 Feb, 2008 04:05

Basic Element ready to buy 100 % of Russia’s No.2 insurer

Basic Element, the majority shareholder in Russia’s number two insurer, Ingosstrakh, is ready to buy 100 per cent control of the company. Billionaire Oleg Deripaska’s holding is in talks to buy out minority shareholder PPF Investments of the Czech Republi

The ongoing saga about management strategy at Ingosstrakh could soon be resolved.

Basic Element says a legal battle initiated by the Czech-based company has forced it to bid for all of Russia’s second largest insurer.

After months of wrangling over board representation and corporate strategy, Basic Element says it's in negotiations with the Czech company but has not disclosed the price it's offered for the stake.

However, experts say that PPF investments may not want to sell. The Czech company has recently sold a 49 per cent in the subsidiary through which it owns a stake in Ingosstrakh to Italian insurer, Generali.

Russia’s fast- growing insurance market is becoming a magnet for large international insurers, and these often prefer to buy into existing companies than to start their business in new markets from scratch.