Narrative
Full Description
Project narrative
On January 19, 2014, Millennium Gain Limited — a Chinese private investment company and direct subsidiary of Hong Kong-based Fosun Group (复星国际) — announced that it had won the bid for the proposed acquisition of 80% of the share capital and voting rights of 3 Portuguese health and travel insurance companies: Fidelidade (Companhia de Seguros, S.A.), Multicare (Seguros de Saúde, S.A.), and Cares (Companhia de Seguros, S.A), all of which are wholly-owned subsidiaries of one of the largest state-owned bank, Caixa Geral de Depósitos, S.A. for €1.038 billion. While Millenium Gain intended to finance the acquisition partially using its own resources, it had also secured a senior secured syndicated loan worth of €550 million from ICBC (captured via Record ID#103136) and Bank of China (captured via Record ID#103137). Then, on February 7, 2014, the company and the Portuguese Bank’s insurance arm entered into a direct reference sale agreement. ICBC had provided a letter of guarantee for a large part of the acquisition. On May 15, 2014, Millennium Gain completed the partial acquisition. At the time of its May 2014 announcement, the deal was reported as the company’s largest acquisition deal overseas. The purpose of the loan is to support the acquisition. Fosun acquired the insurance firms to identify different opportunities within Portugal and other parts of Europe, covering industries including real state, leisure travel, health care and consumer sectors. In 2014, Fosun used its resources to acquire another 4.99% of the shared capitals from the companies, increasing its share to 84.99%. The remaining capital is owned by Caixa Geral.
Staff comments
1. The individual contribution of the 2 lenders to this €550 million syndicated loan are unknown. For the time being, AidData has estimated the contribution of Bank of China and ICBC by assuming that each lender contributed an equal amount (€275,000,000) to the loan syndicate. 2. Although the borrowing terms of the loan are unknown, early discussions between Caixa Geral de Depósitos and other potential lenders showed that the intended terms are LIBOR + 400 to 500 bp and 1 year maturity. However, it is unclear whether the Chinese banks used the same rates. 3. The commitment date for the loan is unclear. However, AidData assumes it was committed at the same time when the Chinese company committed to finance the insurance companies in January 2014. 4. Caixa Geral de Depósitos is a Portuguese state-owned banking corporation, and the largest bank in Portugal, established in Lisbon in 1876. CGD now has presence in 23 countries spanning four continents through branches, representative offices or direct equity interests in local financial institutions. 5. Consulting firms White & Case and Uria Menendez advised the two Chinese banks on this loan.