Karnataka Bank to Sell 6% More Stake to Sompo Japan for Universal Sompo General Insurance
Updated On Jan 24, 2020
Sompo Japan Nipponkoa Insurance, a Japanese General Insurer will buy 6% added stake in Universal Sompo General Insurance for Rs. 125 Crore from Karnataka Bank. Karnataka Bank holds 14.26% in the joint venture, as claimed by O N Singh, the Chairman of Universal Sompo.
The deals are currently waiting for IRDAI’s (Insurance Regulatory and Development Authority of India) approval and would reinforce the attractiveness of the insurance industry, which has witnessed various entities like Watsa’sFairfax break from ICICI Lombard.
With the deal, Sompo’s stake will rise to 34.6% and on the other hand, Dabur’s would rise to 12.8%. Karnataka Bank has signed with Sompo and Dabur share purchase agreements leading to Univeral Sompo having Rs. 100 Crore rights issue in the 4th quarter. The bank will sell shares of more than Rs. 3 Crore for Rs. 55 single piece to Dabur and Universal Sompo.
“The year 2017-18 can be termed as very eventful as the company has been able to infuse additional capital of Rs. 100 Crore at fair market value,” Chairman Singh said.
Apart from the Karnataka Bank, the other two promoters (Allahabad Bank and Indian Overseas Bank) didn’t subscribe to it. Also, the government has asked the banks to control getting out of their core business and concentrate where they have expertise.
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