According to sources, Piramal Group and Zurich Insurance may hold half-half in the proposed Special Purpose Vehicle (SPV). Both the companies had submitted non-binding bids in August to buy the general insurance business of Reliance Capital. Bankers say that if this SPV is successful in winning the bid, it will mark Zurich Insurance’s entry into India’s general insurance business.
who are in the race
Piramal had valued Reliance Capital’s general insurance business at Rs 3,600 crore, while Zurich Insurance had bid at Rs 3,700 crore. Another company, Advent, had placed a bid of Rs 7,000 crore. Now Zurich and Piramal are in direct competition with Advent.
Willis Tower Watson was appointed by Reliance Capital’s administrator and committee of creditors for the valuation process. Its actuarial valuation has been reported to be Rs 9,450 crore. The last date for submission of binding bids for Reliance Capital was extended to October.
There were 14 non-binding offers to buy Reliance Capital. The last date to submit the resolution for this was August 29. Besides Piramal Group, Oaktree Capital, Torrent Investments, IndusInd International and Cosmi Financial Services also bid. These companies have made bids to buy the entire company or a few clusters. Advent International and Zurich Insurance had bid to buy 100 per cent stake in Reliance General Insurance. Naveen Jindal Group has bid for Reliance Asset Reconstruction Company as well as Reliance Capital through Jindal Power. Apart from this, Authum Investment has also bid for the company.
what is the matter
Reliance Capital has around 20 financial services companies. These include securities broking, insurance and an ARC. The RBI had on 30 November 2021 dissolved the board of the heavily indebted Reliance Capital and initiated insolvency proceedings against it. The Central Bank had appointed Nageswara Rao as the administrator of the company. Rao had given the option to the bidders to bid for the entire company or individual companies.
Source: navbharattimes.indiatimes.com
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