L&T to buy 50% in Future Generali Insurance

L&T Finance will buy Pantaloon Retail's 50% stake in the general insurance business of Future Generali for an estimated Rs 560 crore

L&T Finance will buy Pantaloon Retail's 50% stake in the general insurance business of Future Generali for an estimated Rs 560 crore.

The deal values Future Generali India Insurance Company at around Rs 1,100 crore.

Pantaloon Retail would be exiting the venture by selling 50% stake through direct and indirect transfer to L&T Finance, sources said, adding the deal could be valued around Rs 560 crore.

The contours of the deal are being finalised and an official announcement is expected tomorrow.

Currently Future Group holds 74% stake in the Future Generali India Insurance Company, while the remaining 26% is with Italy-based Generali Group.

Out of Future Group's 74% stake, 50% was with Pantaloon Retail and 24% was with the promoter of the retail chain -- Kishore Biyani family.

    Earlier this month, Pantaloon Retail had sold 22.5% stake in Future Generali Life Insurance to investment company IITL for an estimated value of over Rs 300 crore. The deal valued the JV at over Rs 1,330 crore.

The move was aimed at helping Future Group to pare some its debt.

Post the transaction, L&T Finance would become the majority shareholder with 50% stake in the general insurance venture.

Future Group, which runs stores under formats like Big Bazaar, Food Bazaar, e-zone is estimated to have a consolidated debt of Rs 6,000 crore.

Last year, the group had hived off its flagship Pantaloon into a separate entity to sell majority stake in it to Aditya Birla Nuvo, which agreed to infuse Rs 1,600 crore.

Similarly, it had sold 53.67% stake in Future Capital Holdings to US-based private equity Warburg Pincus to raise an estimated Rs 560 crore.