State-owned China Reinsurance Group is to receive a US$4 billion bailout from the government in preparation for seeking a foreign strategic investor and eventually a public share sale.
Central Huijin Investment, the central bank arm that manages the state's holdings in financial companies, would inject the money after the State Council approved the overhaul last month, the China Insurance Regulatory Commission said.
China Re has a registered capital of 3.9 billion yuan and is wholly owned by the Ministry of Finance.
After the cash injection, the company will be 92 per cent owned by Huijin, which is likely to be restructured in the near future to become more of an independent state holding company.
The ministry will keep the remaining 8 per cent.
Press reports said China International Capital Corp and Citic Securities had been retained as advisers on the restructuring process, which will involve selling a strategic stake to an international investor with reinsurance experience and the listing of shares, most likely in Hong Kong and Shanghai.
China Re is the only domestic reinsurance company and is considered highly dysfunctional after years of protection as a monopoly.
