Videocon sells-off insurance business
The financially distressed company Videocon Industries Limited has exited its insurance business. The business was co-owned by US-based Liberty Mutual Insurance Group and Videocon Industries.
Videocon Industries is the Indian promoter of the insurance company Liberty Videocon General Insurance Company Limited holding 51.32 per cent stake. The company has sold its entire holding to Diamond Dealtrade Limited, a DP Jindal Group company and Enam Securities Private Limited.
Post the deal, the company will be rebranded and the name Videocon will not be part of the company's name. Diamond Dealtrade Limited will hold 26 per cent stake, while the remaining 25.32 per cent will be held by Enam Securities Private Limited. The insurance regulatory IRDAI had given approval for the stake sale in February 2018.
In July 2016, Liberty, the foreign promoter of Liberty Videocon General Insurance Company had increased its stake in the company to 49 per cent by infusing a capital of Rs. 310 crore into the joint venture. Currently, the total paid-up capital of the company is Rs. 1,084 crore.
Although the deal value has not been disclosed, the sale will help Videocon Industries to payback some of its debtors. Videocon owes around Rs. 45,000 crore to the banks. The company is facing insolvency proceeding in NCLT which was initiated by SBI. The company owes Rs. 3,900 crore to SBI.
At 10:19 hours, Videocon Industries was quoting Rs. 14.32 per share, up by 2.29 per cent on Wednesday, while the BSE Sensex was at 33,338.74, down by 341.98 points or 1.04 per cent.