China’s PICC Property and Casualty Company (PICC P&C) has entered into a capital increase agreement with PICC Group and PICC Reinsurance, under which the reinsurer will receive a capital increase of 2 billion yuan (USD 274 million).
The announcement from PICC P&C confirms that PICC Group will make a capital contribution by way of cash of just over 1 billion yuan (USD 137 million), the majority of which will be contributed to the registered capital increase of PICC Reinsurance and the remaining, roughly 20 million yuan (USD 2.8 million), shall be a premium recorded as capital reserve of PICC Reinsurance.
Additionally, PICC P&C shall make a capital increase of just under 1 billion yuan by way of cash.
Once the capital raise is complete, the registered capital of PICC Reinsurance will rise from 4 billion yuan (USD 548 million) to more than 5.9 billion yuan (USD 808 million).
PICC P&C also explains that following the capital injection, the shareholding percentages of PICC Group and itself in PICC Reinsurance will remain unchanged at 51% and 49%, respectively.
Further, once complete, PICC Reinsurance remains a subsidiary of PICC Group and will not become a subsidiary of PICC P&C.
PICC P&C says that it will pay the capital contribution to PICC Reinsurance in cash with internal resources, with itself and PICC Group set to make a one-off payment of their respective capital contribution amount to the account designated by PICC Reinsurance within three working days after the agreement has been executed.
PICC Group is the controlling shareholder of PICC P&C, holding a 68.98% stake of its total share capital, as of today.
