SBI Life Insurance stock in focus as Carlyle Asia Partners arm mulls exiting the firm

SBI Life Insurance stock is in focus after a Bloomberg report saying that California-based Carlyle Asia Partners may pull the plug on the company.

Bloomberg also said that Carlyle Asia Partners had sold its entire 16.5% stake in SBI Life Insurance to Japanese firm Nomura Holdings in November 2011 for about $350 million.

“Bloomberg is reporting that Carlyle Asia Partners is looking to sell its entire stake in SBI Life Insurance before the end of the year, according to a person familiar with the matter. SBI Life Insurance is seeking a buyer for the company, which, among other things, makes term and whole life insurance policies.”

The Carlyle Asia Partners has sold its SBI Life Insurance investment to Nomura Holdings Ltd. for $350 million in November 2011.

“We are looking at strategic options for the company, which provides life insurance in Australia. The company has managed to keep its services that are core to its strategy intact and has succeeded in attracting new customers.”

“Recent regulatory changes, which are hammering the share price, the company has been able to overcome. We are awaiting a formal announcement of the change in ownership and look forward to working closely with the new owners,” said SBI Life Insurance managing director, Mark Hitchcox.

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SBI Life Insurance (ASX: SBI) has been a popular stock among investors as a result of its high dividend yield. The company had made investments in the health and education sectors, which helped it to develop a strong position in the Australian insurance industry.

The share price has plunged over the last three months as investors become concerned about the company’s capital adequacy, which is the ratio of its reserves and liabilities to the value of its assets.

Carlyle Asia Partners has informed the Australian Securities and Investments Commission that it is considering filing a profit-realization report about SBI Life Insurance, which could potentially be detrimental to investors. Potential investors in the company are encouraged to closely monitor the developments.

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About the Author

Kirsten is a journalist with a decade of experience, covering the Australian media industry as a general reporter. She has also worked with the Financial Review, The Australian, and The Australian Financial Review.

View the author’s post on Crunchbase.

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