Reliance KsgC 1669540769074 1669540769223 1669540769223

Battle for Reliance Nippon Life Insurance: Nippon top brass likely to visit India

The race to acquire Reliance Capital’s 51 percent stake in Reliance Nippon Life Insurance Co (RNLIC) is intensifying, with the top brass of the Japanese joint venture partner likely to visit India this week to raise his concerns over the ongoing resolution process under insolvency laws, sources said.

Japan’s Nippon Life, which holds 49 per cent stake in RNLIC, has opposed the entry of Aditya Birla Sun Life in the race to acquire Reliance Capital’s stake in RNLIC.

Sources with knowledge of the matter said Nippon Life’s global president, Hiroshi Shimizu, along with Minoru Kimura, managing executive officer and head of global affairs, Nippon Life Insurance, and Tomohiro Yao, regional CEO, Nippon Life Asia Pacific and director, RNLIC, is likely to visit Mumbai on Monday.

Shimizu and his team can meet senior officials of the Reserve Bank of India (RBI) and other stakeholders, and inform them of their position regarding their investment in RNLIC and their long-term commitment to the Indian insurance sector.

The visit coincides with the deadline for submission of the final binding bid for Reliance Capital and its subsidiaries, including RNLIC.

Sources said Nippon Life has already made it clear to Y Nageshwar Rao, the insolvency administrator of Reliance Capital, that the company is opposed to the entry of Aditya Birla Sun Life in the bidding process of RNLIC.

It does not want to merge with Birla Sun Life or sell its 49 percent stake in the Indian outfit, sources said, adding that Nippon has emphasized that it is a committed long-term player in the Indian life insurance business, so merging with another life insurance company is not an option for them.

Nippon Life also clarified its position to the top management of Aditya Birla Sun Life, and its foreign partner Sun Life Financial Inc.

To counter the Aditya Birla bid, Nippon Life is also preparing to bid in partnership with an Indian company for Reliance Capital’s 51 percent stake in RNLIC, as Indian regulations limit foreign ownership in the insurance sector to 74 percent.

Sources said Nippon is in talks with Torrent, Cosmea and Hinduja to form a strategic partnership for this bid.

Aditya Birla would like to make a bid for RNLIC. No bids were received in the first round for Reliance Capital’s 51 percent stake. Reliance Capital is being sold to recover unpaid bank charges.

Nippon Life, which already holds 49 percent in RNLIC, is keen to acquire this 51 percent stake, in partnership with a strategic investor. Nippon held several meetings with the Reliance Capital administrator and briefed him on its plans.

But the sudden entry of Aditya Birla Sun Life Insurance upset the company and its plans.

If Birla Sun Life succeeds in acquiring the 51 per cent stake in RNLIC, it will have to merge RNLIC with its existing insurance company – Birla Sun Life Insurance – due to IRDA guidelines that no cross-holding between two insurances is allowed. companies.

The merger will significantly dilute Nippon Life’s stake to less than 10 percent in the merged entity. It will also lose all the shareholder and management rights that exist in terms of the nomination of the CEO, equal representation on the board, member of the audit committee, and veto rights on the reserved matters, in RNLIC.

This story was published from a wire agency feed without edits to the text.

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