Japanese financial services giant Sumitomo Mitsui Trust Holdings Inc may buy a 10% stake in Anil Ambani-owned Reliance Capital by paying $400 million (INR 2,400 crore) at current exchange rates) for new shares, a person with direct knowledge of the talks said. “Talks between the two companies are at an advanced stage and a deal could be signed by September for roughly 10% minority stake,” the same person said. A deal with Sumitomo Mitsui Trust Holdings, if consummated, will be the second-largest investment by the Japanese company in the group and the fourth in the Indian financial services sector. (The Economic Times)
Sundaram Finance to buy out insurance JV partner RSA: Sundaram Finance Ltd is looking to buy RSA Insurance Plc’s stake in their joint venture Royal Sundaram Alliance Insurance Co. Ltd, three people close to the development said. At the same time, the Indian firm is also searching for a new overseas partner as valuations of insurance firms rise in anticipation of a further relaxation of foreign direct investment norms in the sector. The decision to sell stake in Royal Sundaram is in line with RSA’s decision to exit non-core locations, another person said. (Live Mint)
Tata Group, BHEL may bid for Abhijeet Group’s power business: Lenders are seeing a ray of hope as the Abhijeet Group, which is one of the biggest NPAs for the banking industry, is attracting some buyers. The Tata Group and PSU power plant equipment maker Bharat Heavy Electricals Limited have evinced interest in taking over Corporate Power Limited (CPL), a company under this group. The lenders’ consortium had invited bids for taking over CPL, which owes over INR 4,800 crore ($797 million) to a dozen banks. These two companies have purchased the tender documents, which is an indication that they may subsequently bid. The bids will be based on the original offer made by SREI Infrastructure Limited, which had conducted a due diligence following negotiations with CPL. (The Times of India)
Banks to offload Leela loans to asset reconstruction firms: Lenders to the Leela group of hotels have decided to offload loans worth INR 4,000 crore ($664 million) to asset reconstruction companies (ARCs). The move is aimed at reducing pressure from big-ticket bad loans on the lenders’ balance sheets. The bidding process involving ARCs has been underway through the past few days. A senior executive of an ARC said all lenders to the hospitality company had agreed State Bank of India (SBI), one of the lenders, would offload loans to ARCs. Lenders to the company include Bank of India, SBI’s associate banks and Export and Import Bank of India. (Business Standard)
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