Photo by AP
The headquarters building of Fosun Group in Shanghai, China.
(Reuters)
— Chinese conglomerate Fosun International Ltd. said it planned to
raise up to 11.69 billion Hong Kong dollars ($1.5 billion) in a rights
issue to fund mergers and acquisitions in the banking and insurance
industry.
The
move follows Fosun International's confirmation earlier this week that
it had started exclusive negotiations with the Bank of Portugal to buy
Novo Banco.
In
May Fosun agreed to buy the 80% of Bermuda-based insurer Ironshore Inc.
that it did not already own for $1.8 billion and in December 2014 it
agreed to buy Southfield, Michigan-based insurer Meadowbrook Group Inc.
for $433 million.
“In
order to be able to grasp business opportunities as they arise and
actively develop its insurance-oriented comprehensive financial
capability, the company wishes to optimize its capital structure,”
Chairman Guo Guangchang said in a filing to the Hong Kong stock exchange
late on Thursday.
Fosun
will issue up to 871.3 million rights shares, at 56 rights shares for
every 500 ordinary shares held, for HK$13.42 ($1.73) per share, the Hong
Kong-listed company said. Some of the proceeds would be used to repay
loans, it added.
It gave no further details on acquisitions.
Sources
told Reuters last week that Portugal's central bank would turn to Fosun
to negotiate the sale of Novo Banco after talks with China's Anbang
Insurance Group Co. failed.
In
July, the Chinese conglomerate said it had purchased a landmark
building in the centre of Milan, as increasingly bold Chinese firms flex
their financial muscles overseas.
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