Mumbai:
Australian major Insurance Australia Group (IAG), the foreign partner in the SBI General Insurance(SBIG), has finally fully exited the company by selling its 26 per cent to two private equity players,Premji Invest (Premji) and Warburg Pincus Group for $432.38 million.
“Total consideration amounts to over $640 million based on the current exchange rate. Once both transactions are complete, this is expected to result in an increase in IAG’s regulatory capital position of more than A$400 million and a net profit after tax of over A$300 million, which will be recognised in IAG’s FY20 results,'' said a statement from IAG.
With the price,the IAG has concluded the deal with the PE players, put the valuation of the SBIG at Rs 12,000 crore.
The State Bank of India will continue to hold 70 per cent in SBIG.
IAG has entered into a definitive agreement to sell the whole of its 26 per cent in SBIG via two transactions and has said it would gain almost Rs 1500 crore (A$300 million) from its investment in the company done in 2009.
According to the new agreements Premji Invest (Premji) and Warburg Pincus Group to acquire to acquire a 16.01 per cent and 9.99 per cent respectively in the SBI General Insurance.
The transactions are subject to regulatory processes and approvals.
After completion of the IAG transaction, SBI will continue to hold 70 per cent while the other companies,mostly private equity players that will continue to be SBIG stake holders are- Napean Opportunities LLP (an affiliate of Premji Invest) (with 6.01 per cent), WP Honey Wheat Investment Ltd. (9.99 per cent) PI Opportunities Fund (2.35 per cent) and Axis New Opportunities AIF – I (1.65 per cent) in the SBI General.
Dinesh Kumar Khara, Managing Director, (GB&S), SBI, said, “SBI welcomes Premji Invest and Warburg Pincus as our icoming shareholders in SBIG. SBIG has a high-quality management team having an institutional framework with systems and processes in place. This is demonstrated through consistent high growth and positive underwriting results.
Peter Harmer, Managing Director and Chief Executive Office, IAG said, “IAG has enjoyed a strong and successful relationship with the State Bank of India since establishing the SBIG joint venture in 2009. With our sharpened focus on our core territories of Australia and New Zealand, now is the right time for IAG to exit its investment in SBIG.”
Pushan Mahapatra, MD & CEO, SBIG said, “We are glad to welcome Premji Invest and Warburg Pincus and look forward to an enriching association to support SBIG’s continued growth and sustainable profitability. We would like to thank IAG for their efforts in successfully propelling SBIG on its growth path.”