Anbang’s Chinese remains have been valued at more than $5.2 billion in the latest attempt by state watchdogs to dissolve the once high-flying group led by imprisoned billionaire Wu Xiaohui.
Investors are closely following Beijing’s years-long efforts to resolve Anbang afterwards amazing meltdown As a test case for how to manage other defunct groups, which have saddled the country with billions of dollars in debt.
Wu, high-ranking businessman Married into the family of late Chinese leader Deng Xiaoping, he transformed Anbang, a local auto insurance company, through a global acquisition campaign that included buying the famous company. Waldorf Astoria A New York City hotel for just $2 billion.
The debt-laden group’s demise came to a head in 2018 when Wu was imprisoned for 18 years for fraud and embezzlement. It was among a series of meltdowns for Embarrassment of the Chinese government And fueling concerns about hidden corporate debt and instability in the country’s financial system.
Chinese state investors who control Anbang’s assets – renamed noise insurance They plan to sell their stakes for $5.19 billion, according to a filing with the Beijing Financial Asset Exchange.
The filing said that an auction of about 99 percent of the shares in Dajia by the China Insurance Insurance Fund, the insurance sector rescue fund under the Ministry of Finance, and China Petrochemical Corporation, will close on August 12.
When Anbang was placed under state control in 2018, the group had 2 trillion renminbi ($320 billion) in assets. However, Dajia’s total assets were valued at 34.6 billion renminbi ($5.34 billion) with liabilities of 584.6 million renminbi ($90 million), according to the filing. Dajia announced a net profit of 2.9 billion RMB ($448 million) for 2020.
Sale is only available for bids from the consortium. According to people close to Chinese regulators, Beijing wants to operate Dajia under a diversified ownership structure with three to five private or state-owned shareholders. This is part of a plan to reduce risks and add checks and balances after problems under previous private ownership.
Caixin Magazine, a leading Chinese trade publication, reported that the sale attracted interest from as many as six consortia. Among those interested are e-commerce giant JD.com, state-backed automaker Chery Automobile and online insurance company ZhongAn, as well as Primavera Capital, a private equity group run by Fred is, who previously led the China division of Goldman Sachs.
As part of broader moves to improve discipline in China’s markets and the judiciary Implicit warranties so far That the state will always bail out cash-strapped companies, analysts note that Beijing is increasing Encourage creditors and the private sector in China To help share the burden of state lenders.
But the arduous process of decoding the expanded Anbang has already encountered many obstacles. Most notably, a US court late last year ruled in favor of the South Korean company Mirae Asset for killing a A deal worth $5.8 billion To purchase 15 luxury Anbang hotels in the United States.