India’s largest motorcycle maker Hero MotoCorp’s retail lending arm is in advanced talks with Reliance Capital to buy Reliance General Insurance for up to Rs 6,000 crore ($860 million at current exchange rate), people familiar to the development told The Economic Times.
Hero FinCorp is now finally reporting that are in last round of talks with Reliance Capital to buy Reliance General Insurance at Rs 6,000 crore, cited Economic Times.
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“The quality of our general insurance business is top class, and we are presently in exclusive discussions covered by a NDA (non-disclosure agreement) with a strategic buyer, and cannot comment further,” Anil Ambani, chairman of the Reliance Capital said in an interview to ET earlier this week.
Actually the strategic stake sale move comes for Anil Ambani-led company’s plan to reduce debt by Rs 18,000 crore.
Reliance Capital, last week, stated that it will exit the mutual funds business by selling its stake in Reliance Nippon Life Asset Management Ltd (RNAM) to its joint venture partner Japan’s Nippon Life Insurance.
The move could be part of the Anil Ambani-led company’s plan to reduce debt by Rs 18,000 crore. RCap on last week said it will exit the mutual funds business by selling its stake in Reliance Nippon Life Asset Management Ltd (RNAM) to its joint venture partner Japan’s Nippon Life Insurance.
Economic Times said in a report that with the sale proceeds of general insurance and mutual fund businesses, the debt will be brought down by Rs 9,000 crore.
People aware of the development told the ET that the due diligence process is ongoing.
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The report said that Reliance was earlier looking to divest 49 per cent of Reliance General Life Insurance. However, the talks are now for a total sale. However, it is not clear if Ambani would keep a small minority stake and stay on as a small partner in the company.
The strategic sale came into limelight due to failure over IPO plans. Reliance General Insurance had filed for a share sale in February 2019 and after the deadline for its previous IPO plan lapsed.