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Updated on: Wednesday, May 29, 2019, 03:30 AM IST

Swiss Re keen on buying OBC stake in insurance JV

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Mumbai: Zurich-based Swiss Re has expressed interest in buying entire stake of Oriental Bank of Commerce (OBC) in its life insurance joint venture, according to sources. The world’s second-largest reinsurer has submitted its expression of interest (EoI) to acquire OBC’s 23 per cent stake in Canara HSBC Oriental Life Insurance, which will value the insurance JV at about Rs 6,500 crore, the sources said on Thursday. Earlier, private equity players like Carlyle Group, GIC, TPG, Apax Partners and Baring PE had submitted their EoIs for the Canara HSBC Oriental Life Insurance stake.

ICICI Securities, the sole banker to the transaction, expects non-binding bids from interested buyers by the end of January and the transaction to conclude by end of current financial year. OBC had floated a tender document in November, inviting Expression of Interest (EoIs) to sell its entire 23 per cent stake in Canara HSBC Oriental Life Insurance. The state lender expects to raise around Rs 1,500 crore via stake sale and the funds will likely help OBC come out of prompt corrective action (PCA), which was imposed on the lender in October last year due to high non-performing assets. Canara HSBC Oriental Bank Life is the only insurer that sells purely through bank branches. The life insurer posted a net loss of Rs 3.98 crore in Q2FY19 compared to a profit of Rs 22.62 crore in the year-ago period. The firm had assets under management of Rs 13,241 crore as of end-October. Canara HSBC Oriental Life Insurance said, “This is a shareholder matter. We cannot comment on market speculations.” Zurich-based Swiss Re has expressed interest in buying entire stake of Oriental Bank of Commerce (OBC) in its life insurance joint venture, according to sources.

The world’s second-largest reinsurer has submitted its expression of interest (EoI) to acquire OBC’s 23 per cent stake in Canara HSBC Oriental Life Insurance, which will value the insurance JV at about Rs 6,500 crore, the sources said on Thursday. Earlier, private equity players like Carlyle Group, GIC, TPG, Apax Partners and Baring PE had submitted their EoIs for the Canara HSBC Oriental Life Insurance stake. ICICI Securities, the sole banker to the transaction, expects non-binding bids from interested buyers by the end of January and the transaction to conclude by end of current financial year. OBC had floated a tender document in November, inviting Expression of Interest (EoIs) to sell its entire 23 per cent stake in Canara HSBC Oriental Life Insurance. The state lender expects to raise around Rs 1,500 crore via stake sale and the funds will likely help OBC come out of prompt corrective action (PCA), which was imposed on the lender in October last year due to high non-performing assets. Canara HSBC Oriental Bank Life is the only insurer that sells purely through bank branches. The life insurer posted a net loss of Rs 3.98 crore in Q2FY19 compared to a profit of Rs 22.62 crore in the year-ago period. The firm had assets under management of Rs 13,241 crore as of end-October. Canara HSBC Oriental Life Insurance said, “This is a shareholder matter. We cannot comment on market speculations.”

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Published on: Friday, January 11, 2019, 05:06 AM IST
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