India’s Future Group Taps UBS to Sell Insurance JV Stake

India’s Future Group has picked UBS Group AG to lead the sale of its stake in an insurance joint venture with Italy’s Assicurazioni Generali SpA, according to people familiar with the matter.

Future Group is working with the Swiss bank on the plans to dispose its share of the Future Generali life and general insurance businesses, said the people, asking not to be identified as the discussions are private. The Indian group, which controls companies including Amazon.com Inc.’s local retail partner, has held initial discussions with potential buyers, the people said.

The Indian company, which is backed by the Biyani family, is seeking to raise about 25 billion rupees ($330 million) for its stake in the general insurance joint venture, the people said. The firm will only start selling its holdings in the life insurance joint venture after it completes the general insurance unit divestment, one of the people said. The sale process is at an early stage, and the owner could decide not to proceed with any transaction, the people said. Representatives for Future Group and UBS declined to comment.

A deal could come as Future’s founding Biyani family finds itself in breach of terms including collateral cover requirements for loans backed by shares in Future Group’s listed units, people familiar with the matter have said. The coronavirus outbreak has driven asset prices around the world sharply lower, leaving many borrowers who have pledged shares facing calls to shore up their collateral.

Shares of Future Group’s listed units advanced on Thursday, including Future Retail Ltd., which climbed for the first time in 23 days and rose 5% as of 12:32 p.m. in Mumbai. The benchmark S&P BSE Sensex Index gained 3.5%.

Generali in 2018 increased its stakes in the life and general Future Generali partnerships from 25.5% to 49%, investing 120 million euros ($130 million). The life insurance joint venture has written over 1.38 million policies, according to its website. The general insurance JV has more than 36.3 billion rupees of assets under management, according to its 2018-2019 annual report.

Source: Bloomberg Quint