Chinese government-controlled firm Anbang Insurance Group is continuing its massive asset offload with the sale of its remaining stake in a Chengdu city bank. The company, which was once one of the largest conglomerates in the country, had been taken over by the government after a series of scandals involving the mismanagement of finances by its top executives.
This week, the company successfully sold its remaining 20.5 percent stake Chengdu Rural Commercial Bank (CRCB) to two different state-owned enterprises. According to an announcement posted on its website, the company sold its 10.5 percent stake to state-owned firm Chengdu Wuhou Industry Investment & Development Group, while the remaining 10 percent was sold to state-owned enterprise Chengdu Hi-tech Investment Group.
The exact amount of the two transactions was not disclosed in the post but prior exchange filings had shown that the value of the stake was worth around 8.7 billion yuan or roughly around $1.23 billion. The estimate already takes into account the discounts the company had made when it failed to sell the stake during two separate occasions.
China had had already sold the company's 35 percent stake in CRBC last month to state-owned enterprise Chengdu Xingcheng Investment Group. The exact amount of the transaction was also not disclosed but Anbang had previously tried to sell the stake at 16.5 billion yuan.
The stake sale is the latest asset offload since the Chinese government took control of the conglomerate back in 2018. The takeover was part of a crackdown on massive financial risks taken by private companies that threatened national stability.
Anbang was found to have made highly-leveraged buying sprees prior to the crackdown, leading to the arrest of its founder and former chairman Wu Xiahui. The executive has since charged and sentenced to 18 years in prison for embezzlement and defrauding the company's investors.
During the first three quarters after the government took control, the value of Anbang's assets was reduced by 9.8 percent, while its liabilities had declined by 11 percent. A Shanghai court initially ordered the company to sell its 7.2 percent stake in China Zheshang Bank last year. The stake, valued at around 6.87 billion yuan, still remains unsold.
Anbang had also found a buyer for its US luxury hotel portfolio but that transaction has been put on hold. The buyer, South Korea's Mirae Asset Global Investment, had requested an extension to the transaction given the spread of the coronavirus pandemic. Apart from the CRCB stake sale, Anbang had successfully sold its stake in Sichuan-based Hexie Health Insurance and its stake in Dutch insurer Vivat NV.
