Indian business conglomerate Piramal Group and Zurich Insurance are looking to form a joint venture to take over Reliance General Insurance, reported The Economic Times, citing sources.
Reliance General Insurance, which is undergoing a resolution process, is a subsidiary of debt-trapped Reliance Capital.
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In August this year, both the parties had submitted a non-binding bid for the general insurance business, the publication said citing sources.
Both may hold a 50% stake each in the proposed special purpose vehicle (SPV), they added.
Zurich Insurance has confirmed its individual offer to acquire a stake in the Reliance General Insurance Company as part of the resolution process.
In a mail, the Switzerland-based insurer said: “The terms of any transaction is subject to negotiations and there can be no assurance that a transaction will take place.”
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By GlobalDataIf the proposed JV is finalised as the resolution applicant, Zurich Insurance will enter the general insurance business in India.
Neither Zurich Insurance nor the Piramal Group has confirmed about this JV.
In their bids, Piramal had valued Reliance Capital’s general insurance business at INR36bn ($441.66m), while the Swiss insurer had quoted INR37bn for the business.
According to the actuarial valuation Reliance General Insurance is valued at INR94.5bn, sources told the publication.
The administrator and committee of creditors of Reliance Capital have extended the last submission date for binding bids to 30 October 2022.
In November 2021, the Reserve Bank of India overrode Reliance Capital’s board over payment defaults and governance issues.
Subsequently, the central bank initiated insolvency proceedings against the company and in February this year, the RBI-appointed administrator invited expressions of interest for the sale of Reliance Capital, a non-banking financial company.
