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The National Reinsurance Corp. of the Philippines (PhilNaRe) has
tied up with a Singapore-based firm to expand its business in the
region, the company disclosed Friday to the Philippine Stock
Exchange.
According to PhilNaRe, the country’s only
reinsurance firm, the memorandum of understanding it entered with
ACR Capital Holdings Pte Ltd. on June 5 may lead to a possible
long-term strategic partnership in building its portfolio of Asian
businesses.
The potential tieup may also help PhilNaRe build
a domestic catastrophe pool in the country and provide technical
expertise on large commercial risks underwriting on a facultative
basis. The company also said ACR Capital may help build an IT system
that will enhance its operations and “explore the possibility of
ACR investing in PhilNaRe.”
The two parties, however, would have to discuss
and negotiate further, conduct due diligence, secure government and
regulatory approvals and execute definitive agreements for this plan
to bear fruit.
ACR Capital owns 30 percent of ACR Capital
Reinsurance Malaysia, a non-life reinsurance company, and the
remainder by Khazanah Nasional Berhad (Khazanah), which is exclusive
to clients in Malaysia.
Last year, PhilNaRe mulled over the possibility
of entering the international market through the Hong Kong or
Singapore bourse to raise more capital for its expansion in the
region. Instead of getting a strategic partner, it considered
selling shares to the Southeast Asian market if the “conditions
were right.”
It listed with the PSE last year and raised
about P 2.8 billion from its initial share sale to the public to
grow its capital and have enough leverage to increase its capacity
to accept and retain premiums. After the planned listing with a
regional bourse PhilNare said it then would be able to strike
strategic alliances with other international firms or work for its
possible absorption later on.
The International Finance Company, the
investment arm of the World Bank, expressed interest in supporting
PhilNaRe’s initial public offer through private placement of $15
million. However, the deal did not progress, prompting the
reinsurance firm to open possible partnership talks with other
reinsurance firms.
-- Likha C. Cuevas-Miel
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