Chinese state-owned investors plans to sell off the remains of collapsed insurance conglomerate Anbang for more than USD$5 billion, several years after disgraced helmsmen Wu Xiaohui received an 18 year prison sentence.
The China Insurance Security Fund and China Petrochemical Corp plan to auction off nearly 99% of shares in Dajia Insurance – the successor to Anbang, for $5.19 billion, according to a filing made with the Beijing Financial Assets Exchange.
Anbang was first acquired by these state-owned vehicles in 2018, at which time it had 2 trillion yuan (approx. $320 billion) in assets.
Total assets have since been assessed at 34.6 billion yuan (approx. $5.32 billion), with liabilities of 584.6 million yuan ($90 million), according to to the latest filing. Net profits of Dajia insurance were 2.9 billion yuan in 2020.
Only consortiums are eligible to bid in the auction sale, with Chinese regulators reportedly planning to transition Dajia to a diversified ownership structure with several private and state-owned shareholders in order to reduce risk.
Participating consortiums reportedly include Chery Automobile, insurtech company Zhongan and private equity group Primavera Capital.
Anbang was one of a number of Chinese groups which aggressively pursued offshore investments last decade, before Beijing put a cap on their overseas acquisitions several years due to mounting risk concerns.
The company, which had its origins as a vehicle insurance company, managed to acquire the iconic Waldorf Astoria hotel in New York City for nearly USD$2 billion, prior to its downfall in 2018 when Wu Xiaohui was sentenced to 18 years in prison for fraud and embezzlement.