Mumbai: Central Bank of India is on the verge of acquiring Future Enterprises’ (FEL) stakes in two insurance joint ventures, as the debt-ridden conglomerate undergoes insolvency proceedings.
The state-owned bank is likely to take over Future Enterprises‘ 25% stake in Future Generali India Insurance Co. and a 33% stake in Future Generali India Life Insurance Co., according to people familiar with the matter. The acquisition comes as the bank seeks to increase its presence in the insurance sector, where it currently holds a minority stake.
Lenders to Future Enterprises had divided the company’s assets into three groups – insurance ventures, textile businesses and other residual stakes.
“Central Bank’s bid has been accepted by the committee of creditors and will be announced this week,” said a source.
Italy’s Generali, which owns 74% of the joint ventures, had wanted to partner with a public sector lender, which will help in expanding the distribution, said the source.
The spokesperson of Central Bank and the resolution professional (RP) of Future Enterprises could not be reached for comment immediately.
Central Bank has emerged as the frontrunner after outbidding several contenders, including Capri Global, JC Flowers and Authum.
While Authum, Capri and JC Flowers had shown interest in acquiring all assets of Future Enterprises, Central Bank focused solely on the insurance stakes. Other than Central Bank, M Pallonji & Co., Kotak Alternate Asset and Globe Capital had all shown interest in the insurance stakes.
Brescon Realty, Orissa Metaliks and Uniworth Finlease were among the bidders for the third cluster, which includes all the residual investments of the company, including the two manufacturing units at Tarapur in Palghar district of Maharashtra and Mahadevapura, a suburb of Bengaluru.
Future Enterprises, part of the broader Future Group, was forced into insolvency after defaulting on ₹25,000 crore in loans.
In 2022, lenders got ₹1,266 crore from Future Enterprises after the group completed the sale of its general insurance business to Generali. After the sale of the stake, Generali owns 74% of the general insurance venture, the highest permissible foreign direct investment.
