Blackstone Eyes LIC’s 14% Stake in SHCIL PE FIRM IN TALKS TO BUY INSURER’S SHARE

Private equity company Blackstone is in talks with the country’s largest insurer LifeInsurance Corporation (LIC) to buy its stake in Stock Holding Corporation of India (SHCIL). The move comes at a time two public sector institutions, IDBI and IFCI, are fighting for control over SHCIL.
LIC holds 14% in SHCIL — India’s largest custodian and depository participant — and plans to sell the stake through a bidding process. “Some companies have evinced interest and we are doing an internal assessment,” said a senior LIC official, confirming the development. “Once it is finalised, we may come up with a public disclosure,” the official said, requesting anonymity. A spokesperson for Blackstone refused to comment on the matter. But two officials familiar with the situation confirmed to ET that the PE group and the insurer are in talks, and that LIC is willing to sell its SHCIL stake.
LIC will appoint SBI Capital Markets to determine the valuation of its holding. “If the valuation amount is more than the price offered by Blackstone, we will set it as the reserve price and ask for bids from interested parties,” said one of the officials close to LIC. The insurer may also offer the right of first refusal to the two existing shareholders, IFCI and IDBI. “If they are not interested, we will sell the shares to the highest bidder,” said another official. LIC may also seek the government’s nod once the valuation of its stake in SHCIL is completed, the official said. At present, Blackstone has investments in companies such as Moser Baer Energy, NSL Seeds, Monnet, CMS Computers, Allcargo, MTAR, NCC and Emcure. The firm’s total investments through the PE route stand at about $1.6 billion.
Earlier, IFCI had raised objections to IDBI’s plan to take over SHCIL. IFCI, which holds 34% stake in the company, is striving to get a seat on its board. IDBI, which holds 19.9% stake in SHCIL, had proposed to take over the company and convert the 227 SHCIL offices into bank branches. Though SCHIL’s board approved the merger plan, IFCI had said the approval was not binding on the company and did not have its consent. The other major stakeholder in SHCIL is SUUTI, which holds 17%.

Source :The Economics Times.
Date : 13/05/2013
Writer : Dheeraj Tiwari (New Delhi)

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