Saturday, 12 September 2015

China's Fosun plans more insurance acquisitions

Business Insurance

Fosun International China
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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