Future Enterprises agrees to sell 25% stake in insurance JV to Generali

Future Enterprises has agreed to sell a 25 per cent stake in its general insurance joint venture, Future Generali India Insurance Company Limited (FGIICL) to its partner, Generali Participations Netherlands N. V.(Generali) for a cash consideration of Rs 1252.96 crore, plus an additional consideration that is linked to the date of the closing of the transaction, the former said in a stock exchange filing.

Generali has also acquired an option to buy out the company’s remaining interest in FGIICL, directly or through a nominee, at an agreed valuation subject to applicable regulatory approvals. The transaction is subject to applicable regulatory approvals and other customary conditions.

Generali had earlier received approval from the Competition Commission of India to purchase 16 per cent stake held by Industrial Investment Trust in the life insurance joint venture, FGILICL. It has also agreed to invest up to Rs 330 crore in tranches to fund its growth plans. Pursuant to these transactions, Generali will acquire a majority stake and control in both insurance joint ventures.

Future Enterprises has received offers from potential buyers for its remaining 24.91 per cent interest in FGIICL, it said in its filing.

It is also exploring options for the sale of its 33.3 per cent interest in the life insurance JV and expects to complete the exit of its holding in the insurance joint ventures in a time bound manner to meet its commitment under One Time Restructuring Plan implemented under August 6, 2020 circular issued by Reserve Bank of India in relation to Resolution Framework for Covid-19 related stress.

FEL has to pay lenders approximately Rs 2,000 crore which is due by March and the amount from this stake sale will be used to reduce its debt.

Metta Capital Advisors acted as the financial advisors and Trilegal acted as the legal advisors to FEL for this transaction.