Remains of Anbang in China go on sale with a valuation of $ 5.2 billion
The Chinese government is seeking to sell nearly 99% of its stake in ailing insurance company Anbang, which is valued at 33.6 billion yuan ($ 5.2 billion), according to public records.
The sale, which runs until August 12, marks the government’s latest effort to put Anbang Insurance Group’s remaining assets back into private hands and recoup as much of its bailout funds as possible three years after taking over the plagued insurer. to scandal.
Restructuring is widely seen as a model for how China treats debt-ridden companies that are considered too big to fail.
China Insurance Security Fund (CISF), a bailout-financing company, and state-owned oil giant Sinopec Group, sell their respective 98.23% and 0.55% stakes in Dajia Insurance Group, the company formed to take over assets, according to an article published Friday by the Beijing Financial Assets Exchange.
The sale of the combined 98.78% stake attracted six consortia, Caixin revealed last week. One is run by e-commerce company JD.com and Hopu Investment Management, a private equity firm run by Fang Fenglei, a former Goldman Sachs banker, sources close to Dajia said.
One of the other consortia includes state-owned investment firm Xiamen International Financial Technology and Primavera Capital Group, another private equity firm also headed by former Goldman Sachs banker Fred Hu, the sources said. The consortium also made an offer as part of Dajia’s failed restructuring effort last year.
Other potential buyers include online insurer ZhongAn Online P&C Insurance and state automaker Chery Automobile, they said.
Anbang is one of a group of leading Chinese companies whose debt-fueled expansion in recent years has brought them billions of dollars in assets both at home and abroad. Many were forced to sell their assets after Beijing warned in mid-2017 of the risks posed by their huge debt to the country’s financial system.
First a minor auto insurer in 2004, Anbang started making global headlines in 2014 with a huge surge in overseas purchases, picking up expensive assets like New York’s iconic Waldorf Astoria hotel.
Behind the scenes, Anbang founder Wu Xiaohui took advantage of his connections to a key political figure – his last wife is a granddaughter of the late Deng Xiaoping – and presented himself to outsiders as very connected. By putting pressure on financial regulators and other government officials, Wu pushed for regulatory changes and controlled several financial institutions, which helped bring Anbang’s total assets to over 3 trillion yuan in 2018. , previously reported Caixin.
In 2018, Wu was sentenced to 18 years in prison for fraud and embezzlement.
Regulators took over Anbang the same year, marking the start of a state-led restructuring. Shortly after the takeover, CISF injected 60.8 billion yuan into the technically insolvent insurer. At the end of June 2018, Anbang’s total liabilities exceeded total assets by 82.8 billion yuan.
As part of the restructuring plan, CISF created Dajia in June 2019, which absorbed the main insurance and asset management activities of Anbang, with the aim of introducing strategic investors and transforming Dajia into a private company.
In June 2020, Dajia had accepted offers from two consortia to become new investors: one consisting of Primavera Capital and Xiamen International, and the other comprising electronics giant TCL Technology Group, Caixin revealed the year. last.
TCL then withdrew from the tender due to the impact of the COVID-19 pandemic, which has hit some of Dajia’s assets. With a single consortium committed to making an investment, CISF would have owned 63% of Dajia.
The restructuring plan ultimately failed because it would not have turned Dajia into a privately controlled company and could have resulted in the loss of the rescue fund company, according to people familiar with the matter.
This has led to the current attempt to find new investors, with the main aim of recovering as much as possible of CISF’s 60.8 billion yuan investment, the sources said.
Tang Ziyi contributed to this report.
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