MetLife may Not Get to Exit
US insurer likely to find it difficult to sell its 26% in PNB
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