Debt ridden Future Group: Debt ridden Future Group will exit its insurance business in a time bound manner and to reduce its debt, Future Generali India Insurance Company Ltd. under its Asset Monetization Plan. (FGIICL) plans to sell 25 per cent of its equity to its JV partner Generali. With this the company is estimated to get Rs 1,252.96 crore.
FGIICL, a joint venture between Future Enterprises (FEL) and Generali Participations Netherlands NV (Genrally), operates in the general insurance sector.
Will also sell stake in life insurance venture
In addition, the group led by Kishore Biyani, Generali along with another joint venture Future Generali India Life Insurance Company Ltd. (FGILICL), which provides life insurance services. “The company is exploring options to sell its remaining stake in FGILICL and FGIICL and expects to exit from its insurance joint ventures in a time bound manner,” FEL said in a regulatory filing.
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Group working on One Time Restructuring Scheme
The sale is in line with FEL’s commitment under the One Time Restructuring (OTR) scheme for companies affected by COVID-19, which it had announced with the consortium of banks and lenders last year. Under this, the Future Group company has to repay its debt through asset monetization.
FEL has to repay the debt of 2,200 crores
Under the OTR, FEL has to repay the debt of about Rs 2,200 crore by the end of March this year. At present, FEL holds 49.91 per cent stake in general insurance firm FGIICL and this stake will come down to 24.91 per cent after the deal with Generali. “The General will become the controlling shareholder of FGIICL with a direct and indirect 74 per cent stake,” it said. Presently, Generali holds 49 per cent stake in it.
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Generali has the option to buy the rest of the stake
Apart from this, Generali will also have the option to buy the remaining stake in FGIICL, said a regulatory filing given by the Future Group company. “FEL has agreed to sell 25 per cent stake in its General Insurance Joint Venture to JV Partner Generali for Rs 1,252.96 crore,” the regulatory filing said.
“The deal is subject to regulatory approvals and other formalities,” it said. According to the company, it has received offers from various potential buyers for the remaining 24.91 per cent stake in FGIICL.
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