Nine possible buyers for Nan Shan Life including

It was the first time the government made its position clear on the auction of Nan Shan. Yesterday was the deadline for submitting letters of intent for bidding.

“Nan Shan has almost 50 years of history in Taiwan, and it has many clients,” said Huang Tian-mu, head of the Insurance Bureau of the FSC, which has been mostly reticent on Nan Shan's sale. “We hope the new owner will have a good, capable financial management team and will keep the concept of 'sustainable growth' in mind, just so the interest of its clients will be protected.”

He further said the FSC has relayed this message to Nan Shan's U.S. parent corporation, AIG. “We hope AIG understand Nan Shan's importance and significance for the Taiwanese people,” he said.

He stressed the FSC “does not welcome” buyers who only care about short-term interest. When asked if this means the government doesn't want to see private equity fund bidders, Huang said the FSC is not the seller and will not approve or disapprove who enters the bid.

“Yet, we do have the authority to approve the final transaction,” he said. “For those who want to buy it for a year and then sell it, they will not conform to the FSC's idea of this sale and will not be welcome.”

It was speculated four major private equity funds have entered the bid, namely Carlyle Group, Primus Financial Holdings Ltd., MBK Partners Ltd. and KKR & Co.

AIG, formerly the world's largest insurer, is selling assets outside the U.S. to repay a US$182.5 billion government bailout. The insurer's bailout includes a US$60 billion credit line from the Federal Reserve, a US$70 billion investment from Treasury and US$52.5 billion to fund two vehicles to retire credit-default swaps and a securities-lending program.

With 46 years of history, Nan Shan is owned 97.5 percent by AIG and the rest by its own management. It is the island's second biggest life insurer after Cathay, with 4 million policyholders and 11 percent market share in total premiums. By February, its net worth was NT$86.737 billion, with total asset at over NT$1.5 trillion by the end of April, the local United Evening News reported yesterday.

Possible Bidders

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