China puts Dajia Insurance on the sales block for US$5.18 billion as regulators seek to offload assets from Anbang Group's collapse
China's financial regulators are putting Dajia Insurance Group on the auction block, three years after establishing the state-owned caretaker company to manage the assets of the collapsed financial conglomerate Anbang Insurance Group.
The China Insurance Security Fund has offered to sell 98.78 per cent of Beijing-based Dajia on the Beijing Financial Assets Exchange for 33.57 billion yuan (US$5.18 billion), according to a notice filed via the exchange on Friday.
"This sale of Dajia Insurance includes a 0.55 per cent interest held by China Petrochemical Corporation, [which is] to be sold on its behalf by China Insurance Security Fund," according to the statement.
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The stake held by China Petrochemical, the parent of publicly traded Sinopec, is valued at 186.9 million yuan, according to the statement, without mentioning the 1.22 per cent of Dajia held by China's largest carmaker SAIC Motor.
An undated video footage of Anbang Group's founder and former chairman Wu Xiaohui, standing trial for fraud at the Shanghai No. 1 Intermediate People's Court. Photo: CCTV via AP Video alt=An undated video footage of Anbang Group's founder and former chairman Wu Xiaohui, standing trial for fraud at the Shanghai No. 1 Intermediate People's Court. Photo: CCTV via AP Video
Dajia, which operates as a financial holding company with stakes in insurance and financial institutions, including one of South Korea's largest insurers, has 231 employees on its payroll, according to the filing.
It posted a net profit of 2.9 billion yuan last year on revenues of 89.7 billion yuan, as audited by EY's China unit, the filing said. Net profit amounted to 4.77 billion yuan for the first five months of this year.
With 20.5 billion yuan of net assets, it is valued at 33.98 billion yuan at the end of August 2020, according to the assessment of China United Assets Appraisal, a valuation firm appointed by the Ministry of Finance, the filing said.
The Waldorf Astoria in New York on October 6, 2014. The landmark New York hotel was bought by Anbang in 2013 for nearly $2 billion. Photo AFP alt=The Waldorf Astoria in New York on October 6, 2014. The landmark New York hotel was bought by Anbang in 2013 for nearly $2 billion. Photo AFP
Anbang, which was one of China's largest privately owned insurers at its peak, was seized in February 2018 by the China Banking and Insurance Regulatory Commission (CBIRC), the nations's overseer of banks and insurers, under a nationwide programme to curtail financial risk after a huge asset-buying spree by a few privately controlled conglomerates.
Anbang, tycoon Wang Jianlin's Dalian Wanda Group, Chen Feng's HNA Group, Xiao Jianhua's Tomorrow Group and Ye Jianming's CEFC China Energy - among the biggest leveraged asset buyers in China and abroad - had their wings clipped, put under regulatory scrutiny and their assets forced sold. In particular, China's central bank vice-governor Pan Gongsheng called Anbang out for using a complex web of shareholding structures, false capital injections and misuse of funds from financial institutions.
Anbang officially applied to be disbanded and liquidated last September. The insurer's founder and former chairman Wu Xiaoui was slapped with an 18-year prison sentence after being found guilty of fundraising fraud and embezzlement.
Last September, Beijing published new rules to tighten oversight on the financial sector, by setting requirements on registered capital, total assets, and assets under management for eligibility to become financial holdings firms.
After running Anbang for two years, the CBIRC said it would sell Dajia's stakes to strategic investors.
Several consortiums have submitted bids for Dajia, including Fred Hu's Primavera Capital Group, Xiamen International Financial Technology and a group led by the electronics giant TCL Technology Group, but they all fell through due to various reasons, the Caixin financial news portal reported last year, citing unnamed sources.
Separately, the private equity fund Hopu Investment and a consortium led by the e-commerce platform JD.com have expressed interest in Dajia's stake, Caixin reported last month.
Dajia's spokespeople could not be reached for comments, and phone calls to the CBIRC were not answered on a weekend
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