HONG KONG--(BUSINESS WIRE)--A.M. Best has commented that the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” of China Reinsurance (Group) Corporation (China Re) and its subsidiaries, China Property & Casualty Reinsurance Company Ltd., China Life Reinsurance Company Ltd. and China Continent Property & Casualty Insurance Company Ltd. (CCIC), remain unchanged following the disclosure on the introduction of strategic investors through CCIC’s capital increase announced on March 28, 2018, and April 2, 2018.
China Re’s board of directors has entered into a share subscription agreement, effective on April 2, 2018, between CCIC and its existing shareholder, Ningbo Development & Investment Group Co., Ltd., as well as new strategic investors, namely, Jiangsu Yunshan Capital Management Co., Ltd., CES Capital Holdings Co., Ltd., CEA Industry Investment Co., Ltd., New China Life Insurance Company, Limited, Shanghai SAIC Qixiang Investment Partnership (Limited Partnership), Xiamen CICC Qitong Investment Partnership (Limited Partnership), CGT Investment Management Co., Ltd., and Beijing NavInfo Co., Ltd. This share subscription agreement calls for the issuance of 4.7 billion new shares at RMB 2.28 per share for a total of RMB 10.7 billion (US$ 1.7 billion) (the capital increase). The amount of new capital is equivalent to approximately 14% of China Re’s consolidated net assets as of Dec. 31, 2017. The share subscription agreement is subject to regulatory approval. Immediately after the capital increase, China Re’s shareholding percentage of CCIC will be diluted to 64.30% from 93.18%.
A.M. Best expects the capital increase to continue to support China Re’s consolidated risk-adjusted capitalization in the medium term at current rating level. Moreover, the strategic cooperation with the new investors is expected to enhance CCIC’s business growth and portfolio diversification potential, strengthen distribution network and promote innovation.
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