UPDATE 1-China Strategic: may seek AIG Taiwan deal extension
+ China Strategic says hopes for a conclusion soon
+ Buyers yet to provide requested info: regulatory sources
+ Signs of pressure as deal drags on (Recasts, adds comment)
By Alison Leung and Faith Hung
HONG KONG/TAIPEI, June 14 (Reuters) - The buyers of bailed out insurer AIG's Taiwan unit may seek to extend their deadline for completing a $2.2 billion deal as increasing frustration among regulators looked set to delay it further.
China Strategic and Hong Kong investment firm Primus Financial agreed to buy AIG's Nan Shan unit in October, but have been unable to seal the deal amid concerns in Taiwan over their political connections with mainland China and their lack of expertise in the insurance business.
In the latest sign the deadlock has yet to ease, two Taiwan regulatory sources with direct knowledge of the situation said China Strategic, a battery maker, and Primus have yet to provide all documents requested.
"Since November, they still have not been able to provide all the requested documents. That leaves us in a position where we just don't know when the government can make a decision on the deal," said one of sources.
But Raymond Or, China Strategic's chief executive, told Reuters on Monday that it was working on the request.
"We had submitted the information they required and they later came back with more questions that need to be addressed. So we can't control the timing on when can we draw to a conclusion."
Despite booming business ties, many in Taiwan are suspicious of China's intentions towards the island, while concerns have also been raised over what might happen to Nan Shan's over 4 million policyholders, nearly one-fifth of Taiwan's population.
The buyers and AIG moved to ease some of those concerns last week, offering to put $325 million of the purchase price in escrow for four years to beef up the insurer's capital. But they may consider rejigging the deal.
"If necessary, we will talk to AIG to extend the deadline," Or said. "But it is still early now. From the management point of view we will try our best (to close the deal)."
He added that he had resigned "voluntarily" from China's top political advisory body, the Chinese People's Political Consultative Conference, to help the deal win approval.
"Of the existing board members of China Strategic and the board members that we proposed to Taiwanese regulator for the future Nan Shan board, nobody is a member of the CPPCC except me," Or said.
But one of the regulatory sources said there are at least five major shareholders other than Or that have positions in the body.
One other industry source with knowledge of the situation noted that Taiwan's regulators may be hoping the buyers pull out, saving them from the political minefield the deal has created.
"There is a sense that the government wants the deal to go away. All they need to do is not to make a decision before the deadline," the source said. (Editing by Jonathan Standing)
REUTERS
