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Reliance Capital to sell its RNAM stake to Nippon Life
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SME Times News Bureau | 23 May, 2019
Reliance Capital Ltd (RCAP) on Thursday said it has signed binding
definitive agreements with Nippon Life Insurance of Japan to exit its
stake in Reliance Nippon Life Asset Management Ltd (RNAM).
In a
statement here, Reliance Capital said it will receive approximately Rs
6,000 crore as sale consideration for its stakes in RNAM.
Both partners currently hold 42.88 per cent each in the company, while the rest is held by public shareholders.
Reliance
Capital said that pursuant to the agreements, Nippon Life will also
make an open offer of RNAM to the public shareholders at Rs 230 per
share, as required under market regulator regulations, and reach the
maximum permissible promoter shareholding of 75 per cent for listed
companies.
The transaction price represents a premium of 15.5 per
cent to the minimum 60-day price as specified under the Sebi Takeover
Regulations.
Reliance Capital will receive proceeds of
approximately Rs 6,000 crore ($860 million) through sale of its
shareholding to Nippon Life Insurance at Rs 230 a share, and the
simultaneous Offer For Sale (OFS) to other financial investors.
The
entire proceeds of approximately Rs 6,000 crore will be utilised to
reduce Reliance Capital's outstanding debt by 33 per cent, the company
said.
"I am delighted that our longstanding and most valued
partner, Nippon Life Insurance, is increasing its stake in RNAM to 75
per cent. The monetisation of the RNAM stake is part of our value
unlocking strategy," Reliance Group Chairman Anil Ambani said in a
statement.
"We expect this transaction, together with other deals
underway, to substantially reduce RCAP's debt by over 50 per cent in
the current financial year," he added.
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