BEIJING (Reuters) – China’s Anbang Insurance Group said it will sell its entire stake in a health insurance unit as Beijing speeds up asset disposals at the troubled government-controlled insurance conglomerate.
Anbang said it would sell 77.7% of its stake in Hexie Health Insurance through its property and casualty insurance subsidiary, and the remaining portion to five companies including Fujia Group, a private commerce company.
Fujia Group will take a 51% controlling stake after the deal, the statement said.
Anbang did not reveal the size of the deal, which requires approval from the China Banking and Insurance Regulatory Commission (CBIRC).
The move comes as regulators seek to speed up the process of selling Anbang’s assets to minimize financial risks. Anbang was one of the most aggressive Chinese buyers of foreign assets a few years ago, using leveraged loans and risky short-term financing tools.
More than 1 trillion yuan ($145.4 billion) worth of Anbang assets had been or were in the process of being disposed, CBIRC Vice Chairman Liang Tao told reporters on Thursday.
The regulator also would cut the portion of Anbang’s risky short-term insurance products to under 15% of its total insurance products by 2019, Liang said.
The Chinese government took control of Anbang in February last year, part of a sweeping campaign to reduce financial risk. The company’s former chairman, Wu Xiaohui, was later sentenced to 18 years in prison for fraud and embezzlement.
“For the next step, the takeover team will steadily introduce strategic investors to Anbang and push forward its restructuring,” Liang said, without elaboration.
China has formed a new company called Dajia Insurance Group to take over the assets of Anbang, according to sources familiar with the matter and a government document. The new group was led by He Xiaofeng, the head of Anbang’s takeover team.
($1 = 6.8763 Chinese yuan renminbi)
Reporting by Cheng Leng and Ryan Woo; Editing by Stephen Coates