Pantaloon to sell 22.5% in Future Generali for Rs 300 cr

Pantaloon Retail would sell 22.5 per cent of its stake in Future Generali India Life Insurance to Industrial Investment Trust Limited (IITL) for about Rs 300 crore. Currently, Pantaloon Retail holds 25.5 per cent stake in the insurance company.

Future Generali Life, which started operations in 2007, has seen a 42.3 per cent drop in new premium collections in the first eight months of the current financial year.

IITL is an investment company registered as a non-banking financial company (non-deposit taking) with the Reserve Bank of India (RBI) and is listed on the Bombay Stock Exchange and the National Stock Exchange.

In April 2012, Pantaloon Retail, the country’s largest retailer, had de-merged its apparel and accessories business into a separate company in which Kumar Mangalam Birla’s Aditya Birla Nuvo picked up majority stake.

The move was aimed at reducing the debt of the Future Group, Pantaloon’s parent group, by selling non-core assets. In June 2012, the Future Group sold majority stake in Future Capital Holdings to private equity firm Warburg Pincus.

As of December 31 2012, Pantaloon Retail had consolidated debt of Rs 5,431 crore.

“The transaction is subject to the receipt of the necessary approvals from governmental and regulatory authorities, including the Competition Commission of India, the Insurance Regulatory and Development Authority (Irda) and RBI,” Future Group said in a release.

After the transaction is completed, the Future Group would hold 52 per cent shares in the life insurance company, while foreign partner Participatie Maatschappij Graafschap Holland NV would have 25.5 per cent.

In the April-January period, Future Generali India Life Insurance collected Rs 147.27 crore of new business premiums, 42.3 per cent lower than the premiums collected in the year-ago period. During the same period, on an average, private life insurers saw a fall of only five per cent in new business premium collections.

Future General India Life Insurance is a joint venture between the Future Group and Italy-based Generali Group.

DEAL DOSSIER

^{2011: Nippon Life buys 26% stake in Reliance Life Insurance at an aggregate value of Rs 3,062 crore}

^{April 2012: Japan’s Mitsui Sumitomo (a unit of MS&AD Insurance Group Holdings) announces buying of 26% stake in Max New York Life for Rs 2,731 crore. The life insurer re-branded Max Life Insurance Company, as the US-based New York Life exited the joint venture after nearly 10 years}

^{July 2012: Tata AIG rechristened as TATA AIA following exit of American International Group (AIG) from Hong Kong-based insurer AIA Group}

^{September 2012: Irda approved the 30% stake purchase by Punjab National Bank in MetLife India Insurance}

^{January 2013: Exide Industries decides to acquire 50% remaining stake in ING Vysya Life Insurance for Rs 550 crore, subject to regulatory approvals. ING exits venture}