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PARIS-The state bailout of troubled French insurer Groupe des Assurances Nationales has been delayed until September at the latest.
The French Ministry of Finance said in a statement earlier this month that Finance Minister Dominique Strauss Kahn and GAN Chairman Didier Pfeiffer had agreed to postpone a shareholders meeting scheduled for June 30.
The delay is meant to give the new government extra time to study the GAN situation and to then represent the company's interests to the European Commission in Brussels, Belgium. The Commission reviews state support in light of the potential for giving the company an unfair competitive advantage over other E.U. companies.
GAN's board of directors agreed last week to postpone the shareholders meeting, but no new date was set. A GAN spokeswoman in Paris said the latest date for such a meeting would be September.
The present government was voted into power June 4. The previous government had agreed to a state-backed bailout plan of 20 billion French francs ($3.42 billion) for the company.
The GAN spokeswoman in Paris said there had been no statement from the government about GAN's privatization, planned by the last administration for sometime this year. Spokesmen for the European Commission's Competition Directorate, which must approve the plan, were unavailable for comment.
The delay in GAN's rescue has left stock market analysts confused about the insurer's future. The rescue comprised a recapitalization of 11 billion francs ($1.88 billion) and a state guarantee of 9 billion francs ($1.54 billion) to meet future debts of GAN's real estate mortgage banking unit, Union Industriel du Credit. But the state guarantee only clocks in when UIC's exiting capital is depleted.
"But we don't know how this capital rundown will affect GAN's insurance opera-tions. . . .The situation will take some time to sort out, and a closer scrutiny will have to be applied by the E.C.," said one London-based stock market analyst who asked not to be named.