KUALA LUMPUR, March 16 -- AM Best has maintained the under review with developing implications status for the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of ‘bbb’ of Hyundai Insurance (China) Co Ltd (HIC) China.
According to a statement, the ratings reflect HIC’s balance sheet strength, which AM Best described as very strong, as well as its adequate operating performance, limited business profile and marginal enterprise risk management.
These ratings were placed under review with developing implications on July 30, 2019, following an announcement that HIC planned to raise additional capital via four new investors.
On March 10, HIC obtained regulatory approval to receive capital injections from the new investors, namely Legend Holdings Corporation (Legend Holdings); Dirun (Tianjin) Technology Co Ltd (Dirun); Anhui Easy-Biz Digital Technology Co Ltd; and, Ningbo Meishan Bonded Port Area Sequoia Yaosheng Equity Investment Partnership.
Following the capital injections, HIC’s paid-in capital increased to RMB 1.7 billion (US$240 million) from RMB 550 million (US$79 million). (US$1 = RM4.30)
The parent company, Hyundai Marine & Fire Insurance Co Ltd (HMF), did not participate in the capital injection. As a result, its stake in HIC was diluted to 33 per cent from 100 per cent, while Legend Holdings and Dirun each hold a 32 per cent stake.
HIC’s ratings will remain under review while AM Best continues to hold discussions with the company’s shareholders and management team to assess the full rating impact.
-- BERNAMA
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