China’s Fosun Weighs IPO for Ironshore, Just 4 Months After Acquiring Insurer

By and | March 23, 2016

Fosun International Ltd., the Chinese conglomerate led by billionaire Chairman Guo Guangchang, is weighing a possible initial public offering for Ironshore Inc., just months after acquiring the insurer.

Fosun may also pursue a sale of Bermuda-based Ironshore, according to a person familiar with the matter who asked not to be identified discussing private deliberations.

“No final decision has been made by the respective boards of directors of Ironshore and Fosun on whether, when or where to proceed with the possible offering,” Ironshore said in a statement Tuesday.

Guo’s firm is mulling a retreat after A.M Best announced a review of Ironshore. The ratings firm in December cited “concern over the weak financial profile of Fosun, represented by its high financial leverage and constrained liquidity position.” Downgrades can make it harder to win customers.

Fosun’s shares dropped 17 percent over the past 12 months in Hong Kong. Guo, who describes himself as a student of Warren Buffett, was reported missing in December. He returned later that month after aiding authorities with an investigation, according to people familiar with the matter.

The Chinese conglomerate withdrew an offer in December for Anglo-German banking group BHF Kleinwort Benson Group. It also terminated the planned purchase of Israeli insurer Phoenix Holdings Ltd. in February, two months after the country’s regulators halted the approval process.

The plans for an IPO or possible sale of Ironshore were previously reported by Insurance Insider. A representative for Ironshore didn’t immediately respond to a message. Fosun’s Kate Zhao declined to comment beyond a filing announcing the possible IPO.

[Editor’s note: Standard & Poor’s Ratings Services is keeping its ratings on Ironshore Inc. and Ironshore Holdings (U.S.) Inc. on CreditWatch with negative implications, where it initially placed them on May 4, 2015. S&P said it continues to review Ironshore, following the announcement that its new parent, Fosun International, is considering an IPO of Ironshore ordinary shares. “We will continue to monitor details of the transaction, new ownership structure, Ironshore’s future business strategy, capital management, investment strategy, and regulatory approval process,” S&P said. ]

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