The parent company of Max Life Insurance Max Financial Services (MFSL), has been granted approval by the Department of Economic Affairs (DEA) of the Ministry of Finance to swap Mitsui Sumitomo’s stake in Max Life Insurance with their own shares.
The transaction entails swapping Mitsui Sumitomo’s 20.6 percent stake in Max Life Insurance with a 21.9 percent stake in MFSL, which will be resulting in the MFSL holding which will be more than 93 % stake in the life insurance company.
According to the agreement, MFSL will issue and allot 75.4 million shares which will be equivalent to 21.87 percent of the paid-up share capital to Mitsui Sumitomo.
The company released a statement, “This preferential issuance is in consideration for the transfer of equity shares constituting 20.57 percent of the paid-up share capital of Max Life held by Mitsui Sumitomo’s to MFSL as part of the share swap transaction.”
They further said that the transaction will be consummated upon receipt of approval from the Insurance Regulatory and Development Authority of India (IRDAI).
Currently, MFSL holds a 72.5 percent stake in Max Life and MSI owns a 25.5 percent stake in the life insurance company. Upon completion of this share swap agreement, it would take MFSL a step closer to the fructification of its deal with private lender Axis Bank.
Mohit Talwar, MD, Max Financial and Vice Chairman, Max Group, said, after concluding post regulatory approvals, this transaction will mark an important step for Max Financial to consolidate its shareholding in Max Life paving the way for a new beginning in form of a joint venture with Axis Bank.
Shares of MFSL traded 0.63 percent higher at Rs 623 on the BSE than the previous days’ close.
