Mumbai: Mint brings you your dose of the top deals news, reported from newsrooms across the country
Warburg, Premji to buy $432 million SBI insurance arm stake
Insurance Australia Group Ltd (IAG) is looking to sell its entire 26% stake in SBI General Insurance (SBIG) to Warburg Pincus and Premji Invest for $432.38 million, Mint reported. While Premji Invest has agreed to acquire 16% in the general insurer, Warburg Pincus plans to buy the remaining 10%. The transaction, subject to regulatory approvals, is expected to be completed by 30 June 2020. The country’s largest lender, State Bank of India (SBI), will continue to own 70% in its general insurance arm. The remaining 16.01% will be held by Napean Opportunities Llp (an affiliate of Premji Invest) and 9.99% by WP Honey Wheat Investment Ltd, an investment vehicle of Warburg Pincus. Besides, PI Opportunities Fund-1 will hold 2.35% and Axis New Opportunities AIF-I will hold 1.65% stake in the company. SBI chairman Rajnish Kumar said the bank had dropped a plan to take its general insurance unit public, citing no immediate need for additional capital. India’s largest bank was earlier looking to list SBI General Insurance in fiscal 2021. In November 2018, SBI sold 4% stake in SBI General Insurance for ₹482 crore (around $66 million) to two alternative investment funds (AIFs)—Axis New Opportunities AIF-I and PI Opportunities Fund-I, an AIF of Premji Invest. The transaction valued SBIG at over ₹ 12,000 crore.
LGT Lightstone looks to fund AMP’s India unit
Attracted by India’s green energy trajectory, LGT Lightstone Aspada plans to invest up to $50 million in Canadian firm AMP Solar Group’s India unit, Mint reported citing four people aware of the development. The India-focused impact investment platform will acquire a significant minority stake in AMP Energy. The investment, to be announced shortly, will help form the beachhead for Lichtenstein investor LGT, a bank and fund manager with around $220 billion of assets, to foray into the Indian subcontinent’s energy market. LGT Lightstone Aspada, the world’s largest family-owned private banking and asset management group, has already invested around $180 million in India, including a $12 million investment in Lithium Urban Technologies Pvt. Ltd—India’s first electric cab service. Going forward, it wants to focus on India’s energy-efficiency market, which is estimated at ₹1.5 trillion, in areas such as financing. Formed in partnership with Aspada and LGT in August 2019, LGT Lightstone Aspada is an investment platform of LGT Lightstone. LGT Lightstone is part of LGT Group, owned by the Princely family of Liechtenstein.
CSB Bank may launch share sale next month
Kerala-based private sector lender CSB Bank, formerly The Catholic Syrian Bank, is planning to launch its initial public offering (IPO) in November, Mint reported citing two people aware of the development. Last year, Canadian billionaire Prem Watsa’s Fairfax India Holdings Corp. had acquired a 51% stake in CSB Bank for around $168 million. In a first-of-its-kind approval to help turn around a lender, the Reserve Bank of India had allowed a foreign investment firm to invest in a homegrown bank. As the bank is planning to launch the IPO in November, work on the draft red herring prospectus is going on. The specific timelines for the November launch will be decided after factoring in the response received during the roadshows. CSB is trying to mop up ₹500 crore through the initial share sale, he added. The bank received market regulator Sebi’s approval for its IPO on Monday. The bank, according to its draft prospectus, is looking to raise ₹30 crore via fresh issue of shares to increase its tier-1 capital base and to meet future capital requirements, while its existing shareholders will sell 1.97 crore share through the offer-for-sale route. ICICI Lombard General Insurance, HDFC Life Insurance, ICICI Prudential Life Insurance, Federal Bank and Bridge India Fund are expected to sell their stakes, partially or fully, during the IPO.
Amid a funding squeeze, NHAI seeks bids for fourth bundle of road assets
The National Highways Authority of India (NHAI) has invited bids for its fourth bundle of road assets to be auctioned under the toll-operate-transfer (TOT) model, as it looks to meet divestment targets and raise funds for new projects, Mint reported citing a public notification released late on Wednesday night. This despite the fact that the third round, which has a base price of ₹4,995 crore, is yet to close. In fact, the NHAI has deferred the deadline to submit bids twice—from mid-September to 31 October—following investors’ requests for more time. NHAI, which is the nodal agency of the ministry of road transport and highways, has set an initial estimated concession value of ₹4,170 crore for the bundle. Bidding is expected to close by January 2020. Under the TOT model, long-term concessions for collecting toll revenues are auctioned to the highest bidder. The fourth bundle has seven stretches totaling around 401 km spread across five states. In terms of revenue (toll collection) concentration, a single stretch (Pimpalgaon-Nashik-Gonde also referred as PNG) accounts for around 35% of total collections, while the top two of the seven stretches account for around 55%.
JSW, Adani, Others Express Interest in Avantha Power Arm
Avantha Group’s Jhabua Power, which is undergoing insolvency proceedings, has received expressions of interest from JSW, Adani Power, National Thermal Power Corporation and Tata Power-backed Resurgent Power, The Economic Times reported citing people directly briefed on the matter. A few Singapore-based distressed asset investors and some local asset reconstruction companies are also said to have submitted EoIs, they said, adding that Vedanta group’s Sterlite Power may also participate in the bidding process. The deadline for submission of formal bids for the company is November 15. Jhabua Power was admitted for insolvency proceedings at the NCLT in March. The company operates a 600-MW thermal power plant in Madhya Pradesh which has power purchase agreements with the state electricity boards of Madhya Pradesh and Kerala. Another 600 MW of capacity is under construction. A group of lenders, led by Axis Bank, has outstanding dues of ₹3,000 crore from the company after it defaulted on loans taken to finance its capacity expansion plan conceptualised during a period of financial distress at its parent company, Gautam Thapar-owned Avantha Group. Adani Power and Resurgent Power had also participated in a previously held auction process for the company which was shelved last year because lenders failed to reach an agreement on the sale terms. Adani Power had acquired Avantha Power and Infrastructure subsidiary Korba West Power Company five years ago.
Leelaventure business acquired by Brookfield, company informs BSE
Canadian investor Brookfield has acquired Hotel Leelaventure, as indicated in two postal ballot notices on March 18 and August 10, and that it received the sale proceeds which it paid to banks and financial institutions that had lent it money, The Economic Times reported. The hotels operator announced closure of the deal in a filing with stock exchanges, but did not disclose further details. The company had in March announced plans to sell its hotels in Delhi, Bengaluru, Udaipur and Chennai to Brookfield Asset Management for ₹3,950 crore. Last month, the Securities and Appellate Tribunal (SAT) allowed Leela's sale of assets to Brookfield, rejecting minority shareholder ITC’s application challenging the deal. The tribunal had also vacated its interim order that had barred Leela from declaring the results of the postal ballot. Around 89% of Leela's shareholders had voted in favour of the deal, as per the results the company released after SAT lifted the stay. Leelaventure could go ahead with the transaction as there is no stay or injunction currently. After the SAT order was pronounced, ITC had made a plea that it needed time to appeal in the Supreme Court. The respondents including JM Financial Asset Reconstruction Company, Leelaventure and its promoters had also decided to approach the top court by way of a caveat petition that would give them a chance to put forth their arguments if ITC approached the apex court.