Fosun International, a Chinese multinational conglomerate holding company, has reportedly appointed Deutsche Bank to advise on a potential sale of its share in Peak Re, the Hong Kong domiciled reinsurer, according to a Reuters report.
Citing four people with knowledge of the matter, Reuters notes that the potential sale comes as the Chinese firm continues to struggle with high debts, with the firm’s credit rating downgraded last month by Moody’s and its outlook revised to negative.
According to two of the sources, the potential sale of Fosun’s stake in Peak Re is at an early stage and a formal process is yet to begin.
It’s expected that additional financial details of the assets will be sent to potential buyers by the end of the year, one of the sources told Reuters.
Both Fosun and Peak Re did not immediately respond to requests for comment by Reuters, while Deutsche Bank has declined to comment on the matter.
Currently, Fosun owns 86.9% of the Hong Kong-based reinsurer, and as noted by Reuters, it’s unclear what valuation a sale would ascribe to Peak Re.
It was reported roughly a month ago by Bloomberg that Fosun was exploring its options for Peak Re as it looks to pay down its debt, with sources saying at the time that a deal could value the reinsurer at $500 million to $1 billion.
For 2021, the reinsurer reported a 9% increase in gross written premiums (GWP), as net profit for the year hit $73.2 million, compared to $87.1 million in FY2020.
