PVI looks for a new path

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The deal with Oman Investment Fund (OIF) was planned to finish one month and half ago on May 30.

OIF, which owns a 12.6 per cent stake worth some VND202 billion ($9.75 million) in PetroVietnam Insurance (PVI), is in negotiation to purchase some 8 per cent additional stake of the non-life insurance giant.

The company said it would sell at a price not lower than the book value of VND22,000 per share, much higher the current market price of some VND14,000-VND16,000.

Actually, the issuing shares are in the insurer’s raising fund plan for 2011, in which it will increase its chartered capital by some VND200 billion ($9.66 million) from current VND1.6 trillion ($77.29 million) to VND1.8 trillion ($86.96 million).

“The work with Oman had to be postponed,” said PVI chairman Nguyen Anh Tuan, expecting the final result will be announced next month. “Oman [OIF] is our financial partner and board of directors decided to give priority to the strategic partner in insurance sector.”

The strategic partner in insurance sector, according to PVI, is its essential step at the moment for its model transform to finance-insurance group that kicked-off since middle this year.

PVI’s remodel comes amid a recent trend among domestic insurers to shift businesses models to new levels.

Former Military Insurance Co. announced in July to merge into Military Insurance with 19 units directly under the parent company, accompanied with some arms specialising in financial sector.

SHB-Vinacomin (SVIC) is also transferring to parent-subsidiary model, after the same restructure of BIDV Insurance in 2010.

PVI’s second strategic partner is believed to give strong support to the non-life insurance firm in establishing a re-insurance firm lately this year, followed by a life-insurance arm in 2012. PVI’s leaders, however, did not give details on the deal.

In transforming its plan, PVI also planned to sharply raise fund to VND3.6 trillion ($173.9 million) within next year via private placement to strategic partners and allocating shares to existing shareholders.

The company said its before-tax profit for the first half of this year rose 13 per cent to VND220 billion ($10.62 million), making up some 52.3 per cent this year’s target. That profit was made by revenues advancing 18.6 per cent to VND3 trillion ($144.9 million), accounted to 61.8 per cent 2001’s plan.

PVI’s general director Bui Van Thuan estimated the home insurance market would grow some 10 per cent to 15 per cent this year, compared with average growth of 25 per cent in previous years.

“Domestic insurers will meet with difficulties until this year’s end,” said Thuan.