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China looks to sell 98% holding in scandal-hit Anbang

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Via Financial Times

Beijing is in talks with investors over the sale of all, or part, of its 98 per cent stake in Dajia Insurance, the group formerly known as Anbang that was taken over by the state in 2017 when Wu Xiaohui, its chairman, was accused of fraud.

Anbang had become one of China’s most acquisitive companies, building a sprawling portfolio of banking, insurance and property assets ranging from the Waldorf Astoria in New York to insurance assets in South Korea.

Regulators took control of the company when Wu was detained in 2017. Last year, the company required a $10bn state bailout from the China Insurance Security Fund and Wu was sentenced to 18 years in prison for fraud.

Anbang was renamed Dajia Insurance, or “Everybody’s Insurance”, this year in a signal that it was moving into a new phase. The state’s exit from the group would represent a final step in the rejuvenation of the company.

After the sale of a number of Anbang assets, including a $5.8bn portfolio of hotels sold to South Korea’s Mirae Asset Management in September, the government is pushing forward with talks to secure investors from both the state-owned and private sectors, according to two people familiar with the situation.

The goal was for the CISF, which is controlled by the Ministry of Finance, to cash out of the group, the people said. However, discussions in the past year have persuaded the state to consider selling the company in parcels and, potentially, retain a holding in Dajia.

The potential price for the company was unclear with the talks over a sale in their early stages, according to the people familiar with the matter.

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A single buyer would take on several overseas assets including the Waldorf, retirement homes in Canada and the South Korea insurance company. In China, Dajia has a several financial licences and a large insurance business.

Anbang rose from an obscure insurance group to become one of China’s most aggressive overseas investors and largest providers of investment-style insurance products, before the abrupt downfall of its chairman forced the government takeover to contain systemic risk related high-risk investment products.

It has sold off many of its overseas holdings, echoing the tales of HNA and Dalian Wanda, two other conglomerates that made billions of dollars in overseas investments only to be forced to sell off many of those assets in a crackdown prompted by what regulators viewed as excessive leverage and speculative dealmaking.

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