Future Group plans to sell stakes in life and non-life ventures
Exit of Future Group from Insurance Industry
Future Group has held initial negotiations with prospective investors to sell off its holdings in two insurance ventures - Future Generali India Insurance and Future Generali Life Insurance for life insurance.
The insurers are joint ventures with Generali Participations Netherlands.
Future Group plans to utilise the sales proceeds to repay its debts, reported Livemint.
Two people aware of the ongoing plans of Future Group confirmed this saying that Future Group has held discussions with private equity fund True North, Sunil Munjal-promoted Hero Corporate Services and Wipro founder-chairman Azim Premji-promoted private equity fund PremjiInvest.
While UBS has been appointed as the merchant banker by Future Group to shortlist buyers for the two insurance businesses, Citigroup Global Markets has been hired by Generali to find potential buyers for Generali's stake in the two companies.
Alternative
As an alternative strategy, Future Group has also held talks with State Bank of India (SBI) about a potential merger of insurance assets of the two Future Group insurance companies with the state lender's two insurance subsidiaries. Under this plan, Future Group will sell off its entire stake in the two merged entities to SBI or any other domestic player for funds to repay its debts.
Future Retail and Shendra Advisory Services, the two Indian promoters, together own a 74.49% stake in Future Generali India. Shendra Advisory Services is an SPV of which around 51% is owned by Future Retail and the rest by Generali. Future Retail effectively holds 51% in Future Generali India while the rest is held by Generali.
As for the life insurance venture, the Indian promoters include Future Enterprises (with a 8.62% stake), Sprint Advisory Services (49%) and Industrial Investment Trust (16.88%). Sprint Advisory Services is an SPV of which Future Enterprises holds over 51% while the rest is owned by Generali. So, through this SPV, Future Enterprises indirectly holds around 25% in Future Generali Life, making Future Group's total effective holding in the insurance company 34%. Generali's effective holding is 49% (direct holding 25.5% and the rest through Sprint Advisory). Industrial Investment Trust is an independent entity.