Prudential Financial offers to help Japanese insurer: Report

TOKYO: US life insurer Prudential Financial Inc. is to help restructure Yamato Life Insurance Co., the first Japanese financial firm to fall victim to the financial crisis, the Nikkei daily reported on Saturday.

The financial services firm, unrelated to British insurance group Prudential Plc., is the second-biggest US life insurer and has two Japanese units, Prudential Life Insurance Co. and Gibraltar Life Insurance Co.

Tokyo-based Yamato went bankrupt in October with debts of 270 billion yen (2.9 billion dollars). It was the first Japanese life insurer to fail in seven years, and only the eighth since the end of World War II.

Yamato's court-appointed administrator Hideo Seto issued a statement on Friday, saying that two companies submitted tenders the same day with regard to the failed firm's sponsorship. He did not name the firms.

"I have determined one of the bidders to be appropriate," said Seto in the statement, not specifying when a final decision on the acquirer will be made.

The business daily said Seto had selected Prudential Financial as the potential sponsor and that the other bidder was Tokyo investment firm Advantage Partners LLP.

Nikkei said a final agreement would be made in up to two weeks' time.

Whether Prudential will actually buy Yamato has yet to be confirmed, the daily said.

Yamato could potentially be taken over by the Life Insurance Policyholders Protection Corp. of Japan, an industry-organised safety net of last resort, Nikkei added.

Yamato's negative net worth has grown to 63-64 billion yen, it said.

Prudential's final offer is almost certain to fail to bring it out of negative territory, even if Yamato cuts its liabilities to the limit, and the Japanese industry group is expected to have to make up the shortfall, Nikkei said.