Exclusive-Cinven bought Eurovita bonds from GIC, others to help liquidation-source
By Valentina Za and Emilio Parodi
MILAN (Reuters) — Private equity firm Cinven has agreed to buy back 160 million euros ($170 million) of debt sold by its insurer Eurovita and is open to supporting other measures to avoid a messy liquidation of the Italian company, a person with knowledge of the situation told Reuters.
Cinven this month signed an accord with GIC, Singapore's sovereign fund, and another two investors to purchase from them 140 million euros of Tier2 Eurovita bonds, the source added.
GIC and Eurovita had no immediate comment.
Cinven, which acquired Eurovita in 2017, also launched a tender offer to buy back another 20 million euros of bonds from investors including Italian financial institutions, so that only around 9 million remain outstanding, the source said.
Italian insurance authorities placed Eurovita under special administration this year, the first time they have taken such a step, after rising rates blew a hole in the life insurer's cash reserves.
At one point, Eurovita's capital needs were at least four times higher than what Cinven had put in to try and plug the shortfall, another person with knowledge of the matter told Reuters at the time.
To protect savers, a group of five insurers has agreed to take over the life policies of Eurovita clients, while the rest of the company will be liquidated, in a rescue orchestrated by Italian authorities. The five insurers will become shareholders in a new company dubbed Cronos Vita.
Italian prosecutors have been probing false accounting charges in relation to the blow-up.
Cinven's efforts to stave an insolvent liquidation, in which a company is forced to sell its assets to repay creditors, would improve its position in relation to the criminal inquiry,
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