The Insurance Surveillance Commission has decided to launch turnaround procedures for Ardaf, after the insurance company''s liquidity coefficient and solvency margin dropped below the legally allowed limits.
The two indicators describe the company''s capacity to honour its obligations toward customers and debtors.
Businessman Ovidiu Tender, who controls the company through Tender SA, says this is not a problem. "The turnaround plan was drawn up by CSA together with us. We have already decided on a capital raise," he said.
During a general assembly of shareholders on Monday, the company decided to lift its share capital by 25 million RON (7 million euros) in order to sort out its liquidity problems. The raise will be effected on October 30 this year.
Commission representatives, however, say the decision to start turnaround procedures was necessary in order to stop the solvency and liquidity indicators from deteriorating further. "We have decided on a turnaround plan for Ardaf. We have to go by the law. We will monitor pledges that are made," said Nicolae Crisan, chairman of the Insurance Surveillance Commission.
Beside the share capital raise of 25m euros, the rescue plan includes a series of bans the company will have to observe.
Before the capital raise is performed, Ardaf will no longer be allowed to assume risks on insured sums in excess of 100,000 euros without CSA approval, nor will it be allowed to make any placement in the Tender group without CSA agreement, Crisan explained.
Ardaf will also have to send to the CSA within a maximum 5 days the contracts it has with companies of the Tender group as well as to communicate the details of loans granted to companies of the Tender group. Moreover, the company will be forced to submit daily reports to the CSA for payments higher than 3
