Narrative
Full Description
Project narrative
On August 17, 2014, Fosun International Limited and Mettlesome Investments Limited entered into a definitive equity purchase agreement with Ironshore Inc. in which Ironshore agreed to sell 20% of Ironshore’s total outstanding ordinary shares on a fully diluted basis to Mettlesome Investments Limited. The acquisition was completed on February 12, 2015, with Ironshore issuing 27,980,743 ordinary shares for a cash purchase price of $456,804,000 USD to Mettlesome Investments. On March 6, 2015, in conjunction with the initial post-closing adjustment pursuant to the equity purchase agreement, Ironshore issued 97,296 additional shares to Mettlesome and received a cash purchase price adjustment of $9,776,000 USD. BOC issued a loan to support Fosun's acquisition of the 20% stake in Ironshore, as captured by Record ID#107360. Ironshore Inc. is a Cayman Islands-incorporated global specialty insurance company headquartered in Hamilton, Bermuda, that operates principally in Bermuda, the United States, Lloyd’s, and Ireland as a specialty commercial property and casualty insurer. The acquisition by Fosun was expected to improve its insurance business. Then, on May 1, 2015, Fosun International Limited, Mettlesome Investments (Cayman) III Limited — a Cayman Islands-incorporated special purpose vehicle (SPV) jointly owned by Mettlesome Investments (Cayman) II Limited (80% equity stake) and Mettlesome Investments Limited, a Hong Kong-incorporated wholly-owned subsidiary of Hong Kong-incorporated Fosun Financial Holdings Limited, a wholly-owned subsidiary of Fosun International (20% equity stake) — together with Mettlesome Investment 2 (a wholly owned subsidiary of Mettlesome Investments (Cayman) III) and IS Equityholder Rep, LLC (representing the equity holders of Ironshore) entered into a definitive merger agreement with Ironshore under which Fosun would acquire indirectly the remaining 80% interest in Ironshore that Fosun did not already beneficially own. The acquisition was completed on November 20, 2015 for an aggregate consideration of $2,042,936,000 USD. In 2015, a syndicate of four Chinese state-owned banks, including the Agricultural Bank of China (ABC), Bank of China (BOC), the Bank of Communications (BoComm), and the Industrial and Commercial Bank of China (ICBC), entered into $1.2 billion USD syndicated senior secured term facility agreement with Mettlesome Investments (Cayman) II Limited — a Cayman Islands-incorporated special purpose vehicle (SPV) wholly-owned by Cayman Islands-incorporated SPV Mettlesome Investments (Cayman) I Limited, a wholly-owned subsidiary of Hong Kong-incorporated Ultimate Oasis Limited, a wholly-owned subsidiary of Hong Kong-incorporated Fosun Capital Holdings Limited, wholly-owned by Hong Kong-incorporated Fosun International Limited (“Fosun”), a Chinese multinational conglomerate holding company listed on the Stock Exchange of Hong Kong but headquartered in Shanghai, China which is a subsidiary of Hong Kong-incorporated Fosun Holdings Limited, a wholly-owned subsidiary of British Virgin Islands-incorporated Fosun International Holdings Limited (which owned by the three founders of the company) — to facilitate its acquisition of an 80% stake in Ironshore Inc.. Record ID#107356 captures ABC's contribution. Record ID#107357 captures BOC's contribution. Record ID#107358 captures BoComm's contribution. Record ID#107359 captures ICBC's contribution. The acquisition was completed in November 2015 without any advance notification to or review by Committee on Foreign Investment in the United States (CFIUS). However, concerns later emerged that Fosun International Limited had effectively circumvented Washington’s screening process for inbound foreign capital and the acquisition “gave Chinese spy agencies a pipeline into the names, job titles, addresses and phone numbers of tens of thousands of American intelligence and counterterrorism officials—many working undercover—going back decades.” Ironshore had for nearly three decades sold federal employee professional liability insurance (FEPLI) to officials at the Central Intelligence Agency (CIA) and Federal Bureau of Investigation (FBI) through an American subsidiary known as Wright USA. After the completion of the acquisition, CFIUS launched a post-acquisition review in December 2015. Media reports speculated that CFIUS was more concerned with access to federal employee data following the hack of employee records at the Office of Personnel Management in 2015. Then, in June 2016, Fosun and Ironshore voluntarily filed a joint notice to CFIUS on the acquisition. On June 23, 2016, Fosun International announced it was seeking regulatory approval for the proposed spin-off and separate listing of Ironshore on the New York Stock Exchange or Nasdaq Stock markets. In September 2016, Ironshore sold Wright USA to Starr International Co., Inc. However, questions about a potentially far-reaching security breach continued to swirl for years after the divestiture. On December 5, 2016, Mettlesome Investments Limited and Mettlesome Investments (Cayman) III Limited — both indirect wholly-owned subsidiaries of Fosun International Limited — entered into the stock purchase agreement with Liberty Mutual Insurance Company, in which Mettlesome agreed to sell 100% of the outstanding ordinary shares of Ironshore for a cash consideration of $3,000,000,000 USD. Liberty Mutual completed the acquisition on May 1, 2017.
Staff comments
1. The Chinese project title is 复星国际收购美国特殊险保险公司IRONSHORE 20%股权等重. 2. The precise loan commitment date is unknown. For the time being, AidData has assumed the loan was issued in 2015 (in the year of the acquisition). This issue warrants further investigation. 3. The specific borrowing institution is unknown. For the time being, AidData has coded Fosun International Limited as the borrower. However, it is plausible if not likely that the specific borrower was one of the special purpose vehicle subsidiaries established by the borrower for this acquisition. This issue warrants further investigation. 4. The face value of the M&A loan from Bank of China is unknown. However, given that the total cost of the acquisition was $456,804,000 USD and M&A loans often cover 70% of the total cost of the acquisition, AidData assumes for the time being that the face value of the loan was roughly equivalent to $319,762,800 USD. This issue warrants further investigation. 5. According to Newsweek magazine, Wright USA’s “niche insurance business is little known outside U.S. intelligence circles. In 2008, The New York Times described how the company, founded in 1965 by a former FBI agent, had become a financial lifeline for CIA and other officials who came under fire for their conduct in office and needed expensive legal help. Its clients then included former CIA Director George Tenet; Scott Muller, the agency's former general counsel; John Rizzo, acting general counsel during the George W. Bush administration; and José Rodriguez, the CIA operations chief who in 2005 ordered the destruction of CIA videotapes of the harsh interrogation of two Al-Qaeda operatives. [Wright USA’s] business nearly doubled between 2001 and 2008, from about 17,000 to 32,000 policyholders, ‘spurred in part by a spate of lawsuits, investigations and criminal prosecutions related to mistreatment of detainees from Iraq to Guantánamo Bay, an immigration crackdown and other aftershocks of 9/11,’ wrote [New York Times] national security reporter Scott Shane. It was ‘popular with F.B.I. agents, Secret Service officers, and Immigration and Customs Enforcement workers as well as C.I.A. officers.’ Indeed, Wright USA was the CIA's preferred source for federal employee professional liability insurance, or FEPLI, a former top CIA official tells Newsweek. ‘The whole time I was there, they were the underwriter,’ he says. ‘If you wanted FEPLI, that's where you went.’ In the application form, ‘you have to give a general description of your duties and the kinds of issues you deal with,’ he says. But ‘the people we dealt with were cleared’ to handle such sensitive information. […] ‘Wright's FEPLI insurance business gives it an extraordinary ability to target, collect and aggregate very sensitive information about U.S. intelligence staff and contractors,’ Tom Woolston, a former CIA officer, wrote last year in a private report for a group of potential investors.” See https://www.newsweek.com/2016/07/29/wright-usa-fosun-group-insurance-company-china-476019.html