Videocon to exit insurance biz, sell entire stake to Diamond Dealtrade & Enam
Videocon has submitted its proposal to Insurance Regulatory and Development Authority to sell it's stake in the company. Diamond Dealtrade will buy 26% while and Enam Securities remaining 25.32%.
Mumbai: Bankrupt Videocon Industries, one of the 28 companies that the Reserve Bank of India had directed banks to refer to the bankruptcy court, has sold its entire 51.32% stake in Liberty Videocon General Insurance for an undisclosed amount to Diamond Dealtrade, a DP Jindal Group company, and Enam Securities. The company has submitted a proposal to the Insurance Regulatory and Development Authority to sell its stake in the company. Diamond Dealtrade will buy 26% and Enam Securities the remaining 25.32%.
“We will need additional Rs 400-500 crore in the next two years depending on the growth,” said Roopam Asthana, CEO, Liberty Mutual joint venture company in India. “The three promoters have deep pockets and will help the company in funding the future growth.”
The company, which has an accumulated loss of Rs 700 crore, is looking to break even in another year or two. With new partners and commitment of all promoters, it is committed to grow aggressively, sustainably and profitably, said Asthana.
Liberty Videocon General Insurance had got approval from the regulator to commence operations in April 2013. Initially, Videocon Industries held 74% of the share capital in the insurance firm, and the rest was owned by Liberty Citystate Holdings. After the increase in foreign direct investment limit, Liberty Mutual increased its stake in the company to 49%, leaving Videocon with a 51% share.
“Liberty Mutual is committed to growing its insurance JV in India to better serve the evolving insurance needs of the consumer and commercial customer, and we believe that with the support of these two financially strong local promoters we will be able to even more rapidly build best-in-class capabilities to serve our customers and distribution partners in India,” said Matt Nickerson, president, Liberty Mutual.
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After Liberty Mutual’s capital investment, the paid-up capital of the company went up to Rs 1,084 crore. As of December 2017, Liberty Videocon General Insurance had a market share of 0.54% and growth rate of 38.68%. It operates through 58 branches.
