MetLife may Not Get to Exit

US in­surer likely to find it dif­fi­cult to sell its 26% in PNB

The Economic Times - - Companies: Pursuit Of Profit -

Mum­bai: US in­surer MetLife’s plan to exit its In­dian joint ven­ture may have hit a roadblock, as staterun Pun­jab Na­tional Bank has de­cided to stick on with its own­er­ship in the com­pany.

With nearly half-a-dozen other stake hold­ers also drag­ging their feet, find­ing a buyer for just a 26% stake that MetLife owns in PNB Metlife may be dif­fi­cult, as a po­ten­tial buyer will seek a larger hold­ing and con­trol. Metlife re­cently ini­ti­ated a process to exit the In­dian ven­ture, as did global in­sur­ers New York Life and ING. “In a re­cent board meet­ing, PNB has com­mu­ni­cated that it would want to stay in the in­sur­ance ven­ture,” said a source. “Other in­vestors who were ex­plor­ing an exit with Metlife are likely to stay back in the com­pany post PNB’s de­ci­sion.” Pun­jab Na­tional Bank owns 30% of PNB Metlife. The other in­vestors are El­pro (21%), M Pal­lonji & Co (18%) and Jammu and Kash­mir Bank (5%). It had a share cap­i­tal of ₹ 2,128 crore at the end of March 31, 2016.

PNB did not re­spond to an email seek­ing com­ment.

A se­nior PNB of­fi­cial, on the con­di­tion of anonymity, said the bank is com­mit­ted to stay­ing in the ven­ture. PNB Metlife is the sec­ond largest life in­sur­ance firm pro­moted by a state-run bank, after State Bank of In­dia-led SBI Life.

PNB had bought the stake in Metlife in 2013 with a lock-in of five years. The in­surer is present in 7,000 lo­ca­tions, in­clud­ing through branches of Pun­jab Na­tional Bank.

In Oc­to­ber 2016, the board of Tata Sons had dis­cussed a pro­posal for Tata AIA Life In­sur­ance Co to buy 70% of PNB Metlife for ₹ 2,700 crore. As per the pro­posed struc­ture, PNB would sell its stake in the merged

JO­HAN HEN­DRIK WEISSENBRUCH, en­tity through a put op­tion within 2017, when other in­sur­ers led by three years, or else, Tata and AIA state-run banks grew at a much could ex­er­cise a call op­tion in four­faster speed. Post de­moni­ti­sa­tion, five years. life in­sur­ance com­pa­nies have seen

PNB Metlife had seen an 8% ex­in­creased sale of new in­sur­ance pan­sion in in­di­vid­ual new busipoli­cies. Star Union Dai-Chi and ness in­come dur­ing April-Jan­uary In­di­aFirst have grown at 30% and

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