CHINA Pacific Insurance (Group) Co is in talks with overseas investors like Carlyle Group to swap shares to pave the way for China Pacific's listing in Hong Kong this year.
Carlyle and Prudential Financial Inc will sell their almost 25 percent holding in China Pacific's life insurance arm to China Pacific and, in return, buy shares of China Pacific as part of the swap.
"China Pacific has agreed with Carlyle and Prudential on the stake swap issue," the Shanghai-based insurer said in an e-mailed statement in response to inquiries yesterday. The country's fourth-biggest insurer declined to disclose more details like the stake in China Pacific the Carlyle-led group will hold.
The Carlyle-led group will exchange its 25 percent holding in the life unit for a 19.9 percent stake in China Pacific plus additional investment, the Financial Times reported earlier this year.
China Pacific in 2005 sold 25 percent of its life insurance arm to Carlyle and Prudential Financial Inc for US$400 million. The China Insurance Regulatory Commission, the regulator, has approved Carlyle and Prudential to sell their 499 million shares in China Pacific's life insurance arm to China Pacific.
After the sale, China Pacific will hold 1.948 billion shares of its life insurance arm, or 97.5 percent of the subsidiary's total stake.
Analysts eyed the stake swap as a means to smooth China Pacific's US$1 billion H-share listing plan scheduled this year. The insurer has put the listing plan as a priority in its work schedule this year.
The complicated stake structure in China Pacific - with both the life and property units having investors - and the stake in an insurance college have been major obstacles to China Pacific's listing.
Besides the Carlyle and Prudential investment, Insurance Australia Group Ltd last year agreed to buy 24.9 percent of China Pacific's property insurance arm for up to A$375 million (US$279 million). A clear and transparent stake structure is a requirement for listing in Hong Kong.
China Pacific's bigger rivals like China Life Insurance Co and Ping An Insurance are already listed in Hong Kong and Shanghai.