RENOMIA provides consulting services to acquisition of shopping centres Futurum Ostrava and Haná Olomouc
17. August 2017
RENOMIA, the leading insurance brokerage company in Central and Eastern Europe, has negotiated Warranties & Indemnities insurance for its client Star Capital Investments. Warranties & Indemnities insures the seller's representations and warranties in the acquisition of two shopping centres, Futurum Ostrava and Haná Olomouc. RENOMIA assisted Star Capital Investments during all phases of the acquisition process, from the initial risk assessment, via the scoping of insurance cover appropriate to the type of transaction, non-binding insurance offers from five foreign insurance companies to the conclusion of the insurance contract.
"In today's very active acquisition environment within the Central European real estate market, insurance against risks is a relatively standard component of every transaction, often in combination with title insurance or share insurance," says Hana Pavelková, M&A and Real Estate Specialist.
Insurance is usually negotiated as a multi-annual, for a period of three to seven years, and covers the basic risks associated with breaching any of the representations the seller provides for the status of the company. The subject of insurance are mostly legal and financial aspects such as bookkeeping, taxes, intellectual property rights, compliance with legislation, etc.
"Our transaction consulting helps clients adapt the wording of the insurance contract to the terms of the transaction, thus contributing to a smarter arrangement between both the buyer and the seller," adds Pavelková.
In addition, the buyer can insure against gross negligence and deliberate silence on the part of the seller that could have a significant impact on the quality of the asset and its price. Here, as in other types of insurance, the role of the broker is very important. The broker guides the client through the entire process of negotiating the extent of the insurance, organizes conference calls with foreign insurance companies and is able to fundamentally influence the final insurance contract in favor of its client.