Realty firm DLF has completed sale of its 74 per cent stake in the joint venture DLF Pramerica Life Insurance to Dewan Housing Finance for an estimated Rs 250-300 crore.
In July this year, DLF had announced exit from the life insurance business by selling its entire 74 per cent stake in the JV with US insurance giant Prudential Financial. The JV was announced in 2007 and started operation in September 2008.
"Post completion of all the conditions precedent including regulatory approvals, DLF completed the sale of its 74 per cent stake in the insurance joint venture with Prudential Financial, Inc. to Dewan Housing Finance Corporation Limited (DHFL) & its group entities," DLF said in a filing to the BSE.
Name of the JV shall change from DLF Pramerica Life Insurance Company to DHFL Pramerica Life Insurance Company.
DHFL and Prudential Financial Inc said that they have closed their previously announced JV transaction, following regulatory approval, to provide life insurance products to customers in India.
"Under the agreement, DHFL, along with its promoters' entities, has acquired DLF's 74 per cent stake in DLF Pramerica Life Insurance Company Ltd. DHFL has capped its stake at 50 per cent in accordance with National Housing Bank requirements, while the two other promoter entities have each acquired a 12 percent stake," DHFL said in a statement.
When contacted, the spokespersons of both DLF and DHFL declined to comment on the deal value.
Sources said the consideration is about Rs 250-300 crore.
DLF said the transaction is in line with the company's ongoing strategy to divest non-core businesses.
Sources said with the exit, DLF would not incur annual loss of Rs 100 crore which will strengthen its balance sheet.
To reduce debt and focus on core realty business, DLF has been selling its non-core businesses and assets such as plots, hotels, wind mills and insurance venture. It has raised about Rs 10,000 crore in last three years through divestment of its non-core assets.
The joint venture had reported a combined loss of over Rs 250 crore during past two fiscals.
During 2012-13, the company had earned first premium income of Rs 138.64 crore, a 35 per cent increase over Rs 102.83 crore in the previous fiscal.
At the end of 2012-13, the joint venture completed about four-and-a-half years of operations and had 55 branches in India and a team of 5,487 individual agents.
The JV issued 1,02,418 insurance policies in 2012-13 as against 69,926 in previous year. The share capital of insurer stood at Rs 320 crore at the end of March 2013.