Beijing may sell off 98% stake in the former Anbang Insurance

State’s relinquishing of control seen as last step in company’s rehabilitation

Beijing may sell off 98% stake in the former Anbang Insurance

Insurance News

By Gabriel Olano

The Chinese government is in talks to sell, in part or in whole, its 98% stake in Dajia Insurance, the successor firm of scandal-hit insurer Anbang, according to a report by The Financial Times.

Anbang was seized by state authorities in 2017 after Wu Xiaohui, its former chairman, was arrested over fraud and embezzlement accusations.

Prior to its downfall, Anbang was one of the most acquisitive businesses in China, snapping up numerous assets around the world, ranging from insurance companies in South Korea to the Waldorf Astoria Hotel in New York.

The company received a US$10 billion bailout from the China Insurance Security Fund (CISF), and was later renamed as Dajia Insurance, which translates to ‘Everybody’s Insurance’, according to the report, which also said that Beijing’s relinquishing of control in the insurer would be the last step in its rehabilitation.

Many of the former Anbang’s assets have been sold off in recent months, including a US$5.8 billion portfolio of hotels purchased by Mirae Asset Management of South Korea. According to two people familiar with the situation cited by FT, the government is currently talking with investors from both the public and private sectors to purchase its stake in Dajia.

According to the sources, the CISF, which is under China’s Ministry of Finance, was aiming to cash out of the group. However, later discussions have resulted in the state looking to sell the company in parts and retain a holding in it.

The value of the potential deal, the sources said, was still unclear since the talks are in their early stages.

Anbang, which started as a little-known insurance company, became one of the most aggressive Chinese investors overseas fuelled by huge amounts of debt. It was later forced to dispose of many of its overseas assets, similar to what happened to fellow Chinese conglomerates HNA and Dalian Wanda, which were compelled by regulators to sell amid suspicions of excessive leverage and risky financial behaviour.

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