Part of the shareholdings of the Chinese conglomerate Macrolink Group in Asia Pacific Property & Casualty Insurance are to be auctioned off in tranches next January, with the floor price for each tranche lower than the valuation price of the shares.
The Third Intermediate People’s Court in Beijing recently issued three consecutive judicial directives ordering the auction of the three tranches of shares comprising stakes of 3.8%, 5.4%, and 8.1% in Asia Pacific P&C , the starting prices are to be CNY149.55bn, CNY212.52bn, and CNY318.78bn respectively. However, the tranches are valued at CNY186.94bn, CNY265.65bn and CNY398.48bn respectively, reported the National Business Daily.
The figures show that the combined stake of 17.3% is valued at an aggregate CNY851.07bn, and the auction floor prices totalled CNY680.85bn. This means that the auction floor price is about CNY170bn lower than the appraised value of the shares. Macrolink, which is facing liquidity problems, has defaulted on bond repayments. The company’s total stake in the insurer is 20%, making it Asia Pacific P&C’s second biggest shareholder. The 20% stake is pledged as collateral.
Official data show that Shenzhen-registered Asia Pacific P&C had a solvency adequacy ratio of 315.93% at 30 September 2020.