In a regulatory filing on Thursday, Reliance Capital said that it has signed a definitive agreement with Nippon Life Insurance of Japan to sell its stake in Reliance Nippon Life Asset Management Ltd (RNAM). Both the companies hold 42.88 percent stake in the company each, with the rest being held by public shareholders.
It further said that Nippon Life will also be making an open offer to the public shareholders of RNAM at Rs 230 per share, to reach the maximum permissible promoter shareholding of 75 percent for listed companies.
The offer price has been set at a premium of 15.5 percent to the minimum 60-day price, as specified under the SEBI Takeover Regulations.
Reliance Capital will receive approximately Rs. 6,000 crore ($ 860 million) as proceeds from the sale of its shareholding to Nippon Life Insurance at Rs 230 a share, and the simultaneous Offer For Sale (OFS) to other financial investors.
The Anil Ambani group company has been looking at options to pare its massive debt of Rs 18,000 crore. The entire proceeds of Rs. 6,000 crore from the above said deal will be utilised to reduce Reliance Capital's outstanding debt by 33 percent, the company's statement said.
Anil D. Ambani, Chairman, Reliance Group, said, "I am delighted that our longstanding and most valued partner, Nippon Life Insurance, is increasing its stake in RNAM to 75 percent. The monetisation of the RNAM stake is part of our value unlocking strategy. We expect this transaction, together with other deals underway, to substantially reduce RCAP's debt by over 50% in the current financial year."