Future Group plans to sell a 25% in its general insurance joint venture Future Generali India Insurance Co. Ltd to the Italy-based JV partner Generali Group for Rs 1,252 crore, the company said on Thursday.
“Future Enterprises progresses on its plans to monetise its investment in its insurance joint ventures with Generali, agrees to sell 25% equity in the general insurance JV,” the company said in a filing to the stock exchanges.
“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 release said.
Future Enterprises has two JVs with the Italian financial group – one in general insurance and one in life insurance.
With the proposed stake purchase, Generali will take its stake in the JV to 74% – a foreign direct investment (FDI) limit overseas companies can hold in Indian insurance companies. By selling 25% stake to Generali, Future Enterprises’ share in the Future Generali general insurance will come down to 24%.
Future Enterprises also plans to sell its 33% stake in the life insurance JV with Generali in a bid to pare its debt, a person familiar with the development said. He said Future Enterprises would use the proceeds from stake sales to Generali to service a debt in March. Future Enterprises has to repay a debt instalment of around Rs 2,200 crore by March.