Dajia Insurance Group, the state-owned company created to take over financially stricken Anbang Insurance Group, has continued to dispose of the latter’s assets with the sale of a stake worth CNY14.7bn ($2.1bn) in a major Chinese bank.
Over the past two months, Dajia has sold off Anbang Property & Casualty Insurance’s entire 1.65% stake in Shanghai- and Hong Kong-listed China Merchants Bank, reported Caixin citing a statement released by the bank.
Another Anbang subsidiary still holds a 4.99% stake in China Merchants Bank, according to the statement.
Many of Anbang’s assets have been disposed of since the country’s insurance regulator took over the formerly acquisitive company in February 2018 as it struggled to repay its policyholders, many of whom were buyers of short-term high-yield investment products masquerading as life insurance. Anbang’s founder Wu Xiaohui was sentenced last year to 18 years’ prison for fundraising fraud and embezzlement.
After the takeover, regulators had vowed to sell off Anbang’s unnecessary financial licences and its overseas assets that don’t do much to augment the value of its core insurance business. The sales would also raise money to settle a $10bn government bailout loan In June, the authorities formed Dajia to take over Anbang’s businesses.
Last month, Dajia sold part of its stakes in state-owned China State Construction Engineering Corp and real estate developer China Vanke by swapping the equity for shares in exchange-traded funds, a method increasingly used by large shareholders to reduce their stakes in listed companies without violating restrictions. The stakes sold were worth over CNY11bn, according to Caixin’s calculations based on the share prices on the days of announcement.
Dajia has also reportedly agreed to sell a luxury hotel portfolio for around $5.8bn to South Korea’s Mirae Asset Management.