Reliance Capital to exit Reliance Nippon Life Asset Management
24 May 2019
Reliance Capital Ltd (RCAP) will sell its entire stake in Reliance Nippon Life Asset Management (RNAM) to Nippon Life and in part to public shareholders through an offer for sale to raise about Rs6,000 crore.
Reliance Capital on Thursday said it has signed binding definitive agreements with Nippon Life Insurance of Japan to sell its stake in Reliance Nippon Life Asset Management, according to a statement from Reliance Capital to the exchanges.
Both partners currently hold 42.88 per cent each in the company, while the rest is with public shareholders.
Simultaneously, Nippon Life will also make an open offer to the public shareholders of RNAM at Rs230 per share, so as to reach the maximum promoter shareholding of 75 per cent as required under Sebi listing regulations.
Reliance Capital proposes to use the entire proceeds of about Rs6,000 crore to reduce its outstanding debt by 33 per cent.
"Pursuant to the agreements, Nippon Life will also make an open offer to the public shareholders of RNAM at Rs. 230 per share, as required under SEBI 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," as per a stock exchange filing.
Anil Ambani, chairman, Reliance Group, said, “The monetisation of the RNAM stake is part of our value unlocking strategy. 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.”
Reliance Capital proposes to focus only on financial services, with housing, SME and consumer finance as the three new growth engines.