RIL picks Bharti's 75 per cent stake in AXA Insurance JVs

However, D-Street estimate puts the valuation of the deal for Bhart’s 74 per cent stake in AXA insurance at around Rs 3,000 crore.

In effect, AXA, Bharti Enterprises and RIL announced that they have reached an understanding on the acquisition by RIL and its associate Reliance Industrial Infrastructure (RIIL).  This transaction is subject to negotiation and entering into legally binding agreements between RIL, RIIL and AXA and obtaining necessary approvals from Irda.

On completion of the proposed transaction, RIL and RIIL would effectively own respectively 57 per cent and 17 per cent in both insurance companies and would become AXA’s joint ventures partners in India. At the same time, AXA would retain its current 26 per cent shareholding and would continue to manage the day to day operations of the JVs.

 Also, the pact contemplates an option by which AXA would acquire from RIL and RIIL upto 24 per cent shareholding in both the insurance companies in accordance with the applicable regulations as and when the FDI regulations permit such holding by AXA.

Upon exercise of such option, RIL will effectively own 45 per cent and RIIL will effectively own 5 per cent and AXA the balance 50 per cent in both the insurance companies.
 In fiscal year 2011, Bharti AXA Life collected premiums of Rs 790 crore and Bharti AXA GI collected gross direct premiums of Rs 550 crore.

SBI breaches norms on RIL exposure

New Delhi: SBI has breached RBI’s credit exposure norms during three consecutive years with regard to its loans provided to Mukesh Ambani-led Reliance Industries (RIL).

The public sector lender, which also has significant exposures to troubled Air India besides certain telecom firms being probed in relation to the 2G scam, has disclosed that its credit to RIL was in excess of limits prescribed under RBI’s prudential credit norms.

Detailing the cases where it breached prudential limits for single-borrower exposure during fiscal ended March 31, 2011, SBI has named RIL as also public sector majors Indian Oil and BHEL as three such borrowers in its annual report.

This is third straight year when SBI has exceeded single-borrower ceiling with regard to RIL, as per bank’s annual reports for past three financial years. However, it brought down its exposure to RIL within limit on the last date of previous fiscal, ie March 31, 2011. SBI had provided credit in excess of prudential norms to RIL during 2009-10 and 2008-09 also.