L&T May Acquire Pantaloon Retail's Stake In Future Generali

L&T Finance is planning to acquire Pantaloon Retail's stake in Future Generali India Insurance Company, a general insurance JV of Kishore Biyani.

If the deal materialises, the acquisition will enable L&T to synchronise its insurance business under L&T's financial services offering which is still a part of the parent company and is not part of the group's financial services arm, as stated by ET.

L&T Insurance which started general insurance business two-and-a-half years ago, has a capital base of R415 Cr.

However, Pantaloon Retail has denied any such transaction with L&T at this stage, on BSE.

Future Generali Life Insurance was formed in 2007 as a 74:26 JV between Future Group and Italy based Generali Group. Of the 74% stake, Biyani's flagship Pantaloon Retail, directly and via special purpose vehicles, holds 50% while the Biyani family holds 24%.

As on June 2012, Pantaloon Retail is estimated to have R5000 Cr in debt, but through a series of strategic deals across businesses including a majority stake sale to Aditya Birla Group, Future Group has brought it down by half in the past six months.

Earlier this year, Warburg Pincus had acquired 42.73% stake in Future Capital from Pantaloon Retail and its wholly owned subsidiary for R470 Cr. It had also invested an additional R50 Cr in for compulsorily convertible preference shares.

Between 5 October and 18 October, Warburg Pincus made an open offer for 26% stake in Future Capital Holdings at Rs.162 per share. Warburg Pincus’ total investment in Future Capital now stands at R790 Cr.

In insurance segment, recently HDI-Gerling was planning to increase its stake from 26% to 49% in their JV with Magma Fincorp – Magma HDI Gerling Insurance subject to final implementation of the Insurance Bill.

Exide Industries planned to buyout ING's 26% stake in the insurance JV - ING Life India and Max India had planned to sell part stake in the insurance JV, Max Life Insurance.

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