20000112

Allianz AG Germany, EFU Group

to invest $6m

in insurance joint venture

ISLAMABAD: Allianz AG Germany and EFU Group are joining hands to establish a joint venture that will provide health insurance services in Pakistan, Board of Investment officials said on Tuesday.

The proposed company "Allianz EFU Health Insurance Company" will be established as an unlisted public limited concern with paid up capital of $6 million, officials said.

EFU Group, a leading provider of group health insurance in Pakistan, will discontinue its existing health insurance scheme once the joint venture is established.

Board officials, said, under the proposed arrangement Allianz AG Germany will hold 80 percent of the equity, while its local partner will own the remaining stock. The two parties have informed the Board of Investment that equity holding in the joint venture, would be subsequently diluted to 51:49 between Allianz AG Germany and EFU Group in Pakistan.

Board of Investment told Fortuna it had forwarded the proposal to Cabinet Committee on Investment for its approval.

However, the project will also require the sanction of Securities Exchange Commission of Pakistan as the present policy for investment in service sector dictates that minimum 40 percent of the equity be held by Pakistani investors within two years of the establishment of a project.

The sponsors have requested for exemption from applicability of this rule for a period of five years. After the expiry of this period, the equity holding will be brought to 51:49, which would be in line with the official policy. The sponsors have assured the government that no part of profits will be repatriated outside Pakistan during this transition period.ÑFortuna