ARDAF shareholders will have to contribute 30.9 million euros to the share capital of the insurance company by September 30 this year, according to a decision of the Insurance Supervision Commission (CSA), which includes the steps to be taken for the financial recovery of the company throughout the receivership procedure. Ardaf shares fell 25% on the stock market yesterday, with the company losing 11 million euros of its market value.

The insurer currently has a share capital of 14 million euros (50 million RON), but the CSA decision says if the company is to bounce back, it needs at least 160 million RON (44.9 million euros) in capital.

The company is controlled by businessman Ovidiu Tender, who owns 70.69% in Ardaf through Tender SA. The remaining shareholders are Clairmont Holding Limited (12.71%), Raiffeisen Zentralbank Austria (10.19%) and other minority shareholders. Ovidiu Tender is currently in custody, and is being tried in the Rafo case.

"The recovery plan proposed by the CSA is very good and helps Ardaf. In theory, the company sees to its business as usual, we sell policies, underwrite, and settle claims," Octavian Manastireanu, chairman of Ardaf's Board of Directors told ZIARUL FINANCIAR.

He specified the shareholders of the company were those that suggested the capital increase amount and the deadline for subscribing it, that is 30.9 million euros by September 30.

CSA has appointed Costea Radu, an independent lawyer, to be the receiver of the company. Besides the capital increase, the recovery plan also includes other steps the company will have to take during this period.

The most important factors are the ban on investment, the reduction of the expenses made to run each branch of the company and the ban on the sale of any assets of the company, CSA's decision reads. Ardaf's assets stood at 50.8 million euros at the end of last year.

"We were not planning to sell assets or make investments in the upcoming period, anyway, so that CSA's list of prohibited things does not affect our business," says Manastireanu.

Ardaf shares listed on the RASDAQ market of the Bucharest Stock Exchange, resumed trading yesterday but were down 25%, the maximum admitted for this market. They had been suspended for two days after the announcement of the CSA about placing the company under receivership.

Therefore the company lost 11 million euros of its market value in a single day, falling to a capitalisation of 34.27 million euros, from the 45.27 million euros before suspension from trading. Ardaf had about 3,000 euros worth of buy orders placed yesterday, and then there were no more buyers, despite a sell order for almost 950,000 shares, worth over 65,000 euros.

The company was the object of another recovery plan last autumn, after a similar decision issued by the CSA in October 2005. Two months and a 5 million-euro capital increase later, CSA considered the plan as fulfilled.

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