UPDATE: Groupama Puts Private Equity Business Up For Sale

Troubled French insurer Groupama said Thursday it wants to sell its private equity business as part of its plan to boost capital and restructure after being badly hurt by the sovereign debt crisis.

"The process has been launched and should be completed by the end of the year," deputy chief executive Christian Collin told reporters. Groupama Private Equity has investments worth EUR500 million, he said.

Groupama also said it expects shortly to receive final bids for its GAN Eurocourtage unit, put up for sale earlier this year. "We should see things more clearly by the end of March," said CEO Thierry Martel.

In a bid to lower the risks associated with the group's former strategy, Groupama also plans to reduce its share portfolio by 35%-40% this year. Groupama notably holds stakes in Societe Generale SA (GLE.FR), Mediobanca Banca di Credito Finanziario SpA (MB.MI), Eiffage SA (FGR.FR), Veolia Environnement SA (VIE.FR), Saint Gobain (SGO.FR) and Bollore SA(BOL.FR).

Asked about which stakes the group plans to sell deputy CEO Collin said: "We will seize opportunities."

Groupama, weighed down by large investments in equities and a high exposure to Greece, is one of the first big European insurers to face major capital adequacy problems as a result of the sovereign debt crisis.

On Thursday reported a EUR1.76 billion loss in 2011, hit by the market downturn and write-downs on its Greek sovereign debt holdings, down from a net profit of EUR398 million.

-By Noemie Bisserbe, Dow Jones Newswires; +33 1 4017 1740; noemie.bisserbe@dowjones.com

(Inti Landauro contributed to this article.)

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