Renaissance Insurance looking for more investment with an eye to EBRD

Renaissance Insurance is looking for up to $250 million in new investment, with the EBRD believed to be looking to come to the party.

Renaissance Insurance President Boris Jordan says furthering the group’s development plans have him looking for up to an additional $250 million

"This business with such plans needs $200 million-$250 million for development. I will be looking for money on the market at the start of next year," he said, adding: "I want to raise the company's capital on correct terms."

Pavel Samiev, Deputy Director of the Expert RA rating agency says the European Bank for Reconstruction and Development (EBRD) is a logical place to look for additional investment knowing Renaissance Insurance well.

“Renaissance is a well managed insurance group with high due diligence and financial stability. It is in the top ratings according to the RA Expert Russian scale. Such successful companies are always looking for stable and experienced investors and EBRD is one of the most preferable and wanted for that role. Main reasons for Renaissance are to raise the cost of the Group and improve quality of their services."

EBRD is known as one of the core investors in Renaissance Life & Pension. Thus, the bank is well informed and gets the latest of Renaissance operational activity and sustainability. While the insurance market is going to boost with new obligatory insurance products the bank may be further interested in doubling its investment in the group.

Samiev also indicated a potential for listing may spur the EBRD.

“It would not be a surprise if Renaissance starts to prepare for an IPO and hence the more known, stable and competent investor will be attracted the higher price the company will get for its shares.”

The EBRD currently owns 30% in Renaissance Life & Pension.  The bank is also the co-owner in Jordan’s Ukrainian insurance projects. EBDR may soon decide to enlarge its stake by 25%-30% in Renaissance Insurance said Jordan, explaining that talks in the past have occurred.

‘It was still unclear then how long the crisis would go on.  At any rate we have started these negotiations in order to acquire additional financing for our projects. This concerned a minority stake, no more than 20%. I am not selling the whole company. We saw the market revive in March and decided to move away from the sale."

Jordan added that Renaissance Life and Pension would announce additional investment in the near future.

 "Renaissance Life and Pensions is developing well but the crisis has had more of an  impact on  this business.  In the end we changed the company's business plan and we plan in the near future to announce additional investment in the development of Renaissance Life and Pensions. Negotiations are now underway with our partners, EBRD, which owns 30% in Renaissance Life.”

Jordan emphasized that the EBRD may look beyond just life insurance.

"It hasn't been ruled out that EBRD's stake will increase in the future, not only in life insurance business but in the entire group of companies,"

Expert RA’s Samiev believes that the EBRD will look to upping investment.

“Despite Renaissance focus on retail insurance rather than corporate the company doing well and looks more attractive for huge investment funds aiming to raise the price of a company and benefit from sale to strategic investors and global insurance groups.”