AIG may look for another buyer for Nan Shan Life unit
By Faith Hung and Argin Chang |
September 1, 2010, Wednesday
|
Print Edition
Print Edition
BAILED-OUT insurer American International Group faces the prospect of looking for another buyer for its Taiwan unit after the island's regulators yesterday rejected a planned US$2.2 billion sale of Nan Shan Life to an investor group led by Primus Financial Holdings.
Taiwan's regulators said AIG's plan to sell Nan Shan to Hong Kong investment firm Primus and battery maker China Strategic did not comply with the island's regulations on Chinese mainland investment, and the buyers did not meet criteria on experience in the insurance business and ability to raise funds.
It gave the buyers 30 days to appeal, but noted that no previous such appeals had succeeded.
AIG, which needs to sell assets to pay back the United States government for the bailout, agreed to sell Nan Shan in October.
The rejection of AIG's Nan Shan plan was the second collapse of a planned Asian deal in four months.
AIG lost a US$35.5 billion sale of Asian insurance unit American International Assurance in May. It now faces the choice of finding another buyer who may offer a lower price for Nan Shan, or hold onto it and find other ways to pay back the bailout money.
"If lower bids are not forthcoming this will further reduce AIG's ability to repay US-based debts," said Wenli Yuan, senior analyst at Celent, a financial industry research and advisory firm.
"AIG may now try to quickly find a willing and acceptable local bidder to complete this process and then re-focus energies on the AIA disposal in Hong Kong, a deal that is likely to contribute far more to the debt-reduction process."
AIG will find Taiwanese bank Chinatrust Financial waiting in the wings for Nan Shan.
The bank has repeatedly said it wants to buy the insurance unit.
Taiwan's regulators said AIG's plan to sell Nan Shan to Hong Kong investment firm Primus and battery maker China Strategic did not comply with the island's regulations on Chinese mainland investment, and the buyers did not meet criteria on experience in the insurance business and ability to raise funds.
It gave the buyers 30 days to appeal, but noted that no previous such appeals had succeeded.
AIG, which needs to sell assets to pay back the United States government for the bailout, agreed to sell Nan Shan in October.
The rejection of AIG's Nan Shan plan was the second collapse of a planned Asian deal in four months.
AIG lost a US$35.5 billion sale of Asian insurance unit American International Assurance in May. It now faces the choice of finding another buyer who may offer a lower price for Nan Shan, or hold onto it and find other ways to pay back the bailout money.
"If lower bids are not forthcoming this will further reduce AIG's ability to repay US-based debts," said Wenli Yuan, senior analyst at Celent, a financial industry research and advisory firm.
"AIG may now try to quickly find a willing and acceptable local bidder to complete this process and then re-focus energies on the AIA disposal in Hong Kong, a deal that is likely to contribute far more to the debt-reduction process."
AIG will find Taiwanese bank Chinatrust Financial waiting in the wings for Nan Shan.
The bank has repeatedly said it wants to buy the insurance unit.
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