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Bond Market News
Future Group’s Sale of Insurance Business Helps Banks Recover Some Money
May 12, 2022
Future Enterprises Ltd (FEL) has sold a 25% stake in its general insurance joint venture (JV), Future Generali India Insurance Co Ltd (FGIICL) to its JV partner, Generali Participations Netherlands N.V. for consideration of INR 12.66bn ($160mn). On receipt of key approvals from governmental and regulatory authorities, the transaction was completed last week. Post-transaction, FEL still holds a 24.91% stake in FGIICL. FEL owes INR 67.78bn ($880mn) to its creditors as the company defaulted on debts. Under the restructuring plan, banks have received some of the proceeds from FGIICL stake sale. State Bank Of India recovered INR 2.9bn ($37mn), Canara Bank got INR 2.2bn ($28mn) and Central Bank of India received INR 1.3 ($17mn). Lenders are expecting further INR 12bn ($160mn) from the residual 24.91% stake sale which is to be completed in the next one month. These asset sales are important for lenders after they voted against the sale of Future Group’s assets to Reliance Retail Ventures Ltd. (RRVL) last month.
Future Retail’s dollar bonds were flat, with its 5.6% 2025s at distressed levels of 19 cents to the dollar.
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