China's Ping An Aims to Raise Fortis Stake to 7%

China's Ping An Insurance wants to raise its stake in Fortis to 7 percent, the Belgian-Dutch financial group's annual report showed on Monday.

China's second largest life insurer recently lifted its stake in Fortis to 4.99 percent from 4.18 percent and deepened their ties further by buying half of Fortis' asset management business for 2.15 billion euros ($3.4 billion).

"Ping An has declared that it ultimately wishes to obtain a 7 percent shareholding in Fortis, and Fortis has stated that it intends to explore possible means to that end," Fortis said in its annual report, made available on Monday.

Ping An took its initial stake in Fortis for $2.7 billion in November, as Fortis raised funds for its acquisition of parts of Dutch rival ABN Amro for 24 billion euros.

Chinese financial firms, flush with cash, have been seeking investments opportunities abroad to fuel growth and have done several deals as their western counterparts find themselves under pressure from the credit crisis.

With the asset management deal, Fortis got a much-needed cash injection to shore up its capital base, eroded by financing for the acquisition of ABN Amro's Dutch operations and asset management unit as well as subprime-related writedowns.

Ping An will have to seek Fortis's approval to increase its stake beyond 5 percent and 7 percent, the annual report said. Ping An will also be able to increase its stake back to 4.99 percent if the shares are diluted.

As long as Ping An holds its stake in Fortis, it will be able to appoint one non-executive director to the board of the financial group, which is based in Brussels and Utrecht.