Target clause in contract for Ethniki

The negotiations between the CVC Capital Partners fund and National Bank of Greece over the latter’s insurance arm, Ethniki Insurance, are focusing on a special clause to be inserted into the sale contract that will provide for the return of part of the price to be paid if the insurer does not meet its target in bancassurance activity, Kathimerini understands.

Talks on the concession of 80% of Ethniki to the sole investor bidding for Greece’s biggest insurer have focused on the price, which NBG is eager to see range between 460-480 million euros.

Sources say NBG and CVC are debating the targets and the value of the activity of selling insurance products through the bank’s branch network, based on which this significant activity of Ethniki will be assessed.

Given the dramatic slump in Ethniki’s bancassurance in the year’s first half due to the pandemic, CVC is setting strict conditions and sources say the final contract will include a clause providing for a capital rebate if the specific targets set are not met.

This is seen to benefit both sides of the negotiations, as it will secure NBG a higher price and CVC some peace of mind.