Max Financial Services Ltd on Thursday said it has received approval from the Department of Economic Affairs for swap of Mitsui Sumitomo’s stake in Max Life with the company. Max Financial Services is the parent of Max Life.
In a regulatory filing Max Financial Services Ltd (MFSL) said it has received approval from the Department of Economic Affairs, Ministry of Finance for the issue and allotment of 7,54,58,088 equity shares, equivalent to 21.87 per cent of the paid-up share capital, of MFSL to Mitsui Sumitomo Insurance Company (MSI).
This preferential issuance is in consideration for the transfer of equity shares constituting 20.57 per cent of the paid-up share capital of Max life Insurance Company Ltd held by MSI to MFSL as part of the share swap transaction, the filing added.
“The transaction will be consummated upon receipt of approval from Insurance Regulatory and Development Authority of India (IRDAI),” the filing noted.
Max Financial Services presently holds a 72.5 per cent stake in Max Life and MSI owns 25.5 per cent stake.
The aforesaid transaction entails swapping by MSI of 20.6 per cent stake that it holds in Max Life with a 21.9 per cent stake in MFSL. This will result in MFSL’s stake in Max Life increasing to 93.10 per cent.
“Once concluded post regulatory approvals, this transaction will mark an important step for Max Financial to consolidate its shareholding in Max Life paving the way for a new beginning in form of a joint venture with Axis Bank,” said Mohit Talwar, MD, Max Financial and Vice Chairman, Max Group.
MFSL had recently announced that Axis Bank and its subsidiaries, Axis Capital Limited & Axis Securities Limited (together Axis Entities), have entered into agreements with Max Financial for acquisition of up to 19 per cent stake in Max Life, in accordance with existing laws and regulations.
Shares of Max Financial Services were trading 0.78 per cent higher at Rs 624 apiece on BSE.
