Future Enterprises (FEL) has agreed to sell a 25 percent stake in its General Insurance Joint Venture, Future Generali India Insurance Company (FGIICL) to its partner Generali Participations Netherlands for cash worth Rs 1,252 crores. FEL has received offers from other companies looking to buy out its remaining 24.91 percent stake.
It expects to exit the holding in a timely manner to meet commitment under the one-time restructuring plan implemented by the Reserve Bank of India (RBI). An additional consideration is also linked to the date of closing of the transaction, an exchange release said.
Generali also has the option to buy out FEL's remaining interest in the insurance company — either directly or through a nominee. The valuation would be subject to regulatory approvals.
Generali has also acquired the 16 percent stake owned by Industrial Investment Trust Limited in the life insurance joint venture and received approval from the competition watchdog, the Competition Commission of India.
Earlier, Generali had agreed to invest Rs 330 crores in tranches in the insurance joint venture. Once these transactions go through, Generali will hold a majority and controlling stake of 74 percent in the insurance company. Consequently, it will have increased board nomination rights, information rights, and a call option on the remaining stake of Future Enterprises.
FEL also is exploring options for the sale of its 33.3 percent interest in FGIICL, as per a press release. Currently, FEL holds a direct and indirect stake of 49 percent in the JV.
At the last count, the shares of Future Enterprises were up over 2 percent to Rs 9.90. In comparison, Sensex was down over 900 points.
First Published: Jan 27, 2022 11:28 AM IST
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