SANTIAGO, Sept 23 Chile's CorpGroup, owner of
bank CorpBanca, said on Monday that it would sell its
insurance units to local company Inversiones La Construccion for
around $165 million.
Chilean billionaire Alvaro Saieh owns both CorpGroup and
SMU, which is strapped for cash after an accounting error led it
to breach debt covenants.
Last month, Moody's Investors Service placed CorpBanca's
ratings on review for downgrade.
At the time, the rating agency said that while the direct
financial connections between CorpBanca and SMU were limited in
terms of loans and funding, "the companies' shared majority
shareholder and the overall tighter market conditions have led
to concerns regarding increasing funding costs that are likely
to affect the bank's profitability."
Monday's deal calls for Inversiones La Construccion
, a pension fund, life insurance, health insurance and
private healthcare services operator, to purchase a 67 percent
stake in CorpGroup Vida Chile, which in turn controls Compania
de Seguros Corpvida y Compania de Seguros Corpseguros.
In midday trading, Inversiones La Construccion's shares were
up 5.2 percent, and CorpBanca rose 3.1 percent.