Aviva adds South Korea, Sri Lanka to Asia exit list

British insurer Aviva plc is putting its South Korean and Sri Lankan businesses on the auction block, sources said, adding to its list of Asia divisions it is selling to help raise money to protect against its euro zone exposure.

Britains second-biggest insurer laid out plans last week to sell under-performing businesses around the world, a move meant to address the company's greater exposure to the troubled euro zone compared with rivals, and to boost a share price that is down more than 36 percent in the past year. Aviva has come under fire for its euro zone exposure and plummeting share price. Irate shareholders forced Chief Executive Andrew Moss to quit on May 8 after determining his pay was out of line with the company's flagging performance.

Aviva did not specify the countries it would exit in its announcement last week.

Avivas South Korean investment in 2008 and the value of its stake in the Sri Lankan company has a combined value of about $66 million and some estimate the deal would fetch about $150 million.

The sources were not authorised to speak to the media. Aviva was not immediately available for comment.

The London-listed insurer needs to shore up its capital base in the light of its exposure to the troubled euro zone.

Aviva, which generated 40 percent of its operating profit in mainland Europe last year, has been hit harder than its main British rivals by the euro zones woes.

Aviva has operations in 10 Asian countries, mostly joint ventures. Its Asia-Pacific operations accounted for 2 percent of its 2011 group operating profit.

Aviva entered the South Korean market in 2008, when it formed a consortium with Woori Financial Holdings Co to buy LIG Insurance Co Ltd for 73 million pounds ($115 million). Aviva holds a nearly 41 percent stake in the joint venture.

Aviva has held informal talks with Woori to sell its stake in the venture to the South Korean partner and Woori is still reviewing the proposal, one of the sources said.

Woori declined comment. In Sri Lanka, Aviva NDB Insurance generated 12.8 billion Sri Lanka rupees ($99 million) in revenue last year and earned a post tax profit of 691.6 million Sri Lankan rupees.

The company had a market value of $36 million based on Wednesdays close, which would give Avivas 51 percent stake a valuation of $18 million. Aviva is also in the process of exiting its Malaysian joint venture with CIMB.

(Reuters)