Groupama understood to be in talks with bankers about selling assets to beef up capital adequacy
Axa and French mutual giant Covea are eyeing up Groupama’s assets, according to reports in France.
Groupama is determined to beef up its capital adequacy which has been eroded by its ownership of junk Greek bonds.
It has also taken taken big losses on two of the main equity stakes in its portfolio, French bank Societe Generale and water group Veolia Environment
“There is no date for expressions of interest, but the French will definitely be there when there is,” said one of the bankers, according to Reuters.
“Interest from outside the country is also possible, although not as obvious as the locals.”
Groupama is also in talks with Munich Re, Swiss Re Ltd and Warren Buffett owned Berkshire Hathaway about investing in the company, said French paper Les Echos.
Groupama is expected to reveal more about the strategic direction on sales it at its annual results. As well as insurance, Groupama has a range of assets that could be sold, including equities and property.
In the UK, Groupama has a broker-only insurer with gross written premium approaching the half billion mark and majority stakes in motorbike broker Carole Nash and Manchester broker Bollington.
Despite two rating downgrades sparked by the troubles emanating from the eurozone crisis, rating agencies expect Groupama to be able to strengthen is capital adequately to make it through the current turbulence.
It has also produced strong half year results in the UK and Europe.
Pre-tax profits were up 34% to £18.5m compared to the same period in 2010, while total revenues were up slightly from last year’s H1 figure of £237.7m to £239.8m.
This recovery was underpinned by the wider rebound in motor rates, which helped hike Groupama’s personal lines revenues to £148.4m from £144.4m.
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