DLF completes 74% sale stake in life insurance JV to Dewan Housing

Realty firm DLF has completedsale of its 74 per ent stake in the joint venture DLFPramerica Life Insurance to Dewan Housing Financefor an estimated Rs 250-300 crore.In July this year, DLF had announced exit from the lifeinsurance business by selling its entire 74 percent stake inthe JV with US insurance giant Prudential Financial.

The JVwas announced in 2007 and started operation in September 2008.

“Post completion of all the conditions precedentincluding regulatory approvals, DLF completed the sale of its74 percent stake in the insurance joint venture with

Prudential Financial, Inc. to Dewan Housing FinanceCorporation Limited (DHFL) & its group entities,” DLF said ina filing to the BSE.

Name of the JV shall change from DLF Pramerica LifeInsurance Company to DHFL Pramerica Life Insurance Company.DHFL and Prudential Financial Inc said that they haveclosed their previously announced JV transaction, followingregulatory approval, to provide life insurance products tocustomers in India.

“Under the agreement, DHFL, along with its promoters’entities, has acquired DLF’s 74 percent stake in DLF PramericaLife Insurance Company Ltd. DHFL has capped its stake at 50percent in accordance with National Housing Bank requirements,while the two other promoter entities have each acquired a 12percent stake,” DHFL said in a statement.

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When contacted, the spokespersons of both DLF and DHFLdeclined to comment on the deal value.Sources said the consideration is about Rs 250-300 crore.

DLF said the transaction is in line with the company’songoing strategy to divest non-core businesses.Sources said with the exit, DLF would not incur annualloss of Rs 100 crore which will strengthen its balance sheet.

To reduce debt and focus on core realty business, DLF hasbeen selling its non-core businesses and assets such as plots,hotels, wind mills and insurance venture. It has raised aboutRs 10,000 crore in last three years through divestment of itsnon-core assets.

The joint venture had reported a combined loss of over Rs250 crore during past two fiscals.During 2012-13, the company had earned first premiumincome of Rs 138.64 crore, a 35 percent increase over Rs102.83 crore in the previous fiscal.At the end of 2012-13, the joint venture completed aboutfour-and-a-half years of operations and had 55 branches inIndia and a team of 5,487 individual agents.The JV issued 1,02,418 insurance policies in 2012-13 asagainst 69,926 in previous year. The share capital of insurerstood at Rs 320 crore at the end of March 2013.

PTI