Anbang denies forced overseas ‘fire sale’

Anbang Insurance Group, one of China’s most prolific cross-border investors in recent years, has denied a report that Chinese authorities have asked it to begin selling its overseas assets and bring the proceeds back to China.

Bloomberg reported the news on Monday, citing people familiar with the matter. Anbang’s international real estate assets include the Waldorf Astoria, which was purchased in 2014 for $1.95 billion, and the Strategic Hotels & Resorts portfolio, which was acquired for $6.5 billion in 2016.

However, Anbang officially responded to the report via WeChat: “Anbang at present has no plans to sell its overseas assets. Currently, Anbang’s various businesses and operations are all normal, and the company has ample cash and sufficient solvency capabilities.”

A source close to the matter told PERE that the insurer would not conduct a “fire sale” of its overseas assets: “How easy is it going to be to sell? The central government is not going to want us to sell at a loss as everyone loses face and Chinese investors as a whole lose credibility.”

The insurer has had a tumultuous time in recent months, with chairman Wu Xiaohui stepping down in June. In an official statement, the group said that Xiaohui is temporarily unable to fulfill his role for personal reasons, but it is understood he has been detained by Chinese authorities.

In his absence, the source said that Anbang is now effectively being run by the China Insurance Regulatory Commission, and that the regulator is undergoing its own internal problems – making any quick sales from Anbang unlikely. CIRC said in April that its head, Xiang Junbo, was being investigated for suspected disciplinary violations.

Any major decisions, moreover, will be postponed until after the 19th National Congress of the Communist Party of China, a leadership transition event, occurs this autumn, the source said. At the event, the bodies that sit atop the Communist Party organization – including the 25-member Politburo, the 7-member Politburo Standing Committee, and the Central Commission for Discipline Inspection – are expected to see their top brass change significantly.

“Until the [19th National Congress] settles, nothing will really happen. We are effectively run by our regulator and CIRC is not motivated to fire sell any of our assets. Its priority is to maintain stable operations,” the source added.

However, despite no immediate plans to sell its real estate assets, there has also been a clear pause in Anbang’s overseas acquisitions. According to the source, Anbang had reached the exclusivity stage on real estate transactions this year, but none of these have yet materialized.