A Hong Kong consortium bidding for Nan Shan Life Insurance Co (南山人壽) said it would deposit US$325 million, or around 15 percent of the purchase price for the insurer, in an account as a pledge of support for the Taiwanese firm.
In October, China Strategic Holdings Ltd (中策集團) teamed up with Primus Financial Holdings Ltd to acquire a 97.57 percent stake in Nan Shan from its US parent, American International Group Inc (AIG), for US$2.15 billion.
China Strategic said in a Hong Kong Stock Exchange filing yesterday that the consortium had reached an agreement with AIG to set up an escrow account at Citibank Hong Kong, from which it would draw money should Nan Shan experience any shortfall in its risk-based capital (RBC).
That would apply if Nan Shan’s RBC ratio falls below 200 percent, in which case it would be required by Taiwanese regulators to raise its RBC to at least 200 percent, it said.
The Nan Shan deal has been under review by Taiwanese regulators since October over a wide array of concerns about the consortium’s shareholding structure and source of capital, as well as its ability to safeguard Nan Shan employees and policyholders’ interests.
The establishment of an escrow account for RBC funding of Nan Shan came after China Strategic CEO Raymond Or (柯清輝) reportedly resigned his membership from an advisory body to the Chinese Communist Party (CCP) earlier this month amid Taiwan’s concerns about his political affiliation, hoping to speed up the consortium’s acquisition of the insurer.
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