BOI sells 18% stake in insurance JV to partner Dai-ichi Life

State-owned Bank of India (BOI) has sold 18 per cent stake in the insurance joint venture (JV) Star Union Dai-ichi Life Insurance Company (SUD) to its Japanese partner.

"Upon change in law, Bank of India has sold its 18 per cent stake in SUD to Dai-ichi Life Insurance Company (DILIC)," the lender said in a regulatory filing.

"The shareholding of DILIC will be 44 per cent up from 26 per cent upon completion of the transaction after receiving necessary statutory/regulatory approvals," it added.

BOI said the transaction was completed on Monday.

With this, the shareholding of BOI has come down to 30 per cent from 48 per cent in SUD. While, Union Bank of India will continue to hold 26 per cent.

SUD was incorporated in 2007 as a JV among Bank of India, Union Bank of India and DILIC to undertake life insurance business in India.

According to the terms of the JV agreement, DILIC had an option to purchase 18 per cent additional stake in SUD upon change in law related to higher stake by foreign partners in their Indian JVs, allowing them to raise their stake from the allowed 26 per cent to up to 49 per cent.

"DILIC has since exercised the call option to acquire the said stake from Bank of India and increased shareholding of DILIC will be 44 per cent up from 26 per cent upon completion of the transaction after receiving necessary regulatory approvals," it said.