CNinsure Sells Datong Life Business Unit to Warburg Pincus
March 25 2011 - 4:15PM
CNinsure Inc. (Nasdaq:CISG) (the "Company" or "CNinsure"), a
leading independent insurance intermediary company operating in
China, today announced that it has reached definitive agreements to
sell its 55% equity interest in Beijing Fanhua Datong Investment
Management Co., Ltd. ("Datong") to Winner Sight Global Limited, an
affiliated entity of Warburg Pincus LLC.
The cash consideration for the sale is approximately USD63.69
million. In addition, Datong agreed to pay a cash dividend of RMB10
million exclusively to CNinsure. The transaction has been completed
on March 25, 2011.
Datong, in which CNinsure acquired 55% equity interest for
RMB220 million in the fourth quarter of 2008, was primarily engaged
in the distribution of life insurance products. Net revenues and
net income derived from Datong for fiscal year 2010 were RMB251.1
million and RMB29.7 million, respectively, representing 16.9% and
7.0% of the Company's total net revenues and net income
attributable to shareholders, respectively.
Commenting on the sale of Datong, Mr. Yinan Hu, CNinsure's
chairman and chief executive officer, stated, "We started our life
insurance distribution business by building a Life Insurance
Business Unit in 2006 and established Datong Life Business Unit in
2008 by acquiring 55% stake in Datong. Over the past two years,
both of our life insurance business units have achieved astonishing
growth. However, the difference in the two business units' business
philosophies and corporate cultures has been increasingly
presenting challenges to us in resources allocation. Therefore, in
order to avoid potential internal friction and streamline our
business structure for more effective management and resources
allocation, we decided to sell all the equity interest we hold in
Datong.
"The sale of Datong will not lead to any change in our growth
strategies. Life insurance business remains to be our strategic
focus. We will continue to strengthen our investment in the life
insurance business to increase its contribution to the
Company."
"2011 is the year for internal restructuring for CNinsure. We
are committed to continuously refining our organizational structure
and business model, as well as building a unified corporate
culture, enhancing organization at subsidiary level and optimizing
profit model, which we believe will pave the way for a quality and
sustainable growth in the next 10 years," Mr. Hu concluded.
About CNinsure Inc.
CNinsure is a leading independent intermediary company operating
in China. CNinsure's distribution network reaches many of China's
most economically developed regions and affluent cities. The
Company distributes a wide variety of property and casualty and
life insurance products underwritten by domestic and foreign
insurance companies operating in China, and provides insurance
claims adjusting as well as other insurance-related services.
Forward-looking Statements
This press release contains statements of a forward-looking
nature. These statements are made under the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. You can identify these forward- looking statements by
terminology such as "will," "expects," "believes," "anticipates,"
"intends," "estimates" and similar statements. Among other things,
the management's quotations and the Business Outlook section
contain forward-looking statements. These forward-looking
statements involve known and unknown risks and uncertainties and
are based on current expectations, assumptions, estimates and
projections about CNinsure and the industry. Potential risks and
uncertainties include, but are not limited to, those relating to
CNinsure's limited operating history, especially its limited
experience in selling life insurance products, its ability to
attract and retain productive agents, especially entrepreneurial
agents, its ability to maintain existing and develop new business
relationships with insurance companies, its ability to execute its
growth strategy, its ability to adapt to the evolving regulatory
environment in the Chinese insurance industry, its ability to
compete effectively against its competitors, quarterly variations
in its operating results caused by factors beyond its control and
macroeconomic conditions in China and their potential impact on the
sales of insurance products. All information provided in this press
release is as of March 26, 2011, and CNinsure undertakes no
obligation to update any forward-looking statements to reflect
subsequent occurring events or circumstances, or changes in its
expectations, except as may be required by law. Although CNinsure
believes that the expectations expressed in these forward-looking
statements are reasonable, it cannot assure you that its
expectations will turn out to be correct, and investors are
cautioned that actual results may differ materially from the
anticipated results. Further information regarding risks and
uncertainties faced by CNinsure is included in CNinsure's filings
with the U.S. Securities and Exchange Commission, including its
annual report on Form 20-F.
CONTACT: Oasis Qiu
Investor Relations Manager
Tel: +86 (20) 6122-2777 x 850
Email: qiusr@cninsure.net
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