The diversified Chinese multinational Fosun International has announced that it is considering pursuing an initial public offering of shares in its Bermuda subsidiary Ironshore.
The statement follows a March 17 story from Insurance Insider revealing that Fosun was exploring a part-sale to ease ratings agency pressure on the recently acquired business.
Fosun said in a statement that it made the announcement in keeping with inside information provisions laid down by the Hong Kong stock exchange.
Fosun completed its acquisition of the remaining 80 per cent of the US excess and surplus lines insurer in November last year. The transaction valued Ironshore at 1.25x book value, taking the total consideration paid for the business to $2.3bn.
The Ironshore group of companies is rated A u (Excellent) by A M Best but it has been under review with negative implications since July last year. The under review with negative implications status reflects A.M. Best’s concerns regarding Fosun’s credit profile and its financial leverage, which could potentially place a strain on Ironshore’s stand-alone capitalisation under certain stress scenarios.
Ratings agencies have tightened their scrutiny of Ironshore recently after its chairman, Guo Guangchang, briefly went missing late last year. Guo, one of China's most successful private businessmen, was called in to assist authorities in an investigation in December, but was later released.
Last month, Fosun dropped a plan to buy a controlling stake in Israeli insurer Phoenix Holdings. Fosun had agreed to buy a 52.31 per cent stake in Phoenix from Delek Group in June last year.