Taiwan’s financial regulator said Friday it has conditionally approved a proposal by US insurance giant American International Group to sell Taiwan unit Nan Shan for $2.16 billion.
A local consortium led by Ruentex, one of Taiwan’s biggest conglomerates, will have to deposit Tw$6 billion ($206 million) cash in a custodial account within 60 days, the Financial Supervisory Commission said.
This is on top of Tw$24 billion previously pledged by the consortium, Ruen Chen Investment Holding, which also includes Pou Chen Corp, a footwear maker.
The consortium has also agreed to place all of its Nan Shan shares in a trust for 10 years to show its long-term commitment and to appoint a president with an insurance industry background, the commission said.
It will also raise an additional Tw$10 billion for Nan Shan by year-end and to ensure the rights of its clients and employees, it said in a statement.
“Nan Shan Life appreciates the authorities’ decision and will collaborate with AIG and Ruen Chen to complete the deal soon under these conditions,” a company statement said.
Troubled AIG, short of cash to repay a US government bailout, announced the planned sale of Nan Shan to the consortium in January in its second bid to find a buyer.
Ruentex is a sprawling conglomerate with interests in sectors as diverse as construction, textile and finance. AIG sold Nan Shan Life to a consortium led by Hong Kong-based Primus Financial Holdings for $2.15 billion in 2009, but the deal was rejected by the Taiwanese regulator last year.
Taipei said the Hong Kong group lacked the experience needed to manage an insurer and argued it had failed to provide a long-term management commitment, claims rejected by the consortium.
The rejection dealt a blow to AIG, once the world’s largest insurer, which has been selling assets to pay back US government loans since its rescue from collapse during the 2008 financial crisis.
Taipei, June 10, 2011 (AFP)
