Reliance Capital gets shareholders' nod for stake sale to Sumitomo Mitsui

New Delhi: Reliance Capital has received shareholders’ approval for its initial stake sale of 2.77 percent worth Rs 371 crore in the company to Japanese financial major Sumitomo Mitsui Trust Bank. The deal would make the Japanese major a strategic partner of Reliance Capital (RCap) to collaborate on various businesses, including in its proposed banking venture.[caption id=“attachment_1606415” align=“alignleft” width=“380”]  Business deal. Reuters[/caption] The Anil Ambani group firm will make preferential allotment of shares to Sumitomo Mitsui Trust Bank (SMTB), as part of long-term strategic alliance announced by the two companies last month. The allotment resolution was passed by an overwhelming majority of 99.99 percent shareholders that voted on the resolution. The results of the voting were announced at an extraordinary general meeting (EGM) of the company held in New Delhi today, Reliance Capital said in a statement. As part of the agreement, SMTB would acquire an initial 2.77 percent strategic stake in Reliance Capital for about Rs 371 crore through the preferential allotment, with a one-year lock-in period. “We would like to thank our shareholders for whole-heartedly supporting this partnership that will help the company tap new growth opportunities and expand our existing business,” Reliance Capital CEO Sam Ghosh said. While announcing the deal last month, both companies had said that Reliance Capital intends to establish a new bank in India, with support of SMTB as strategic partner, as and when RBI’s policies permit formation of the same. SMTB and Reliance Capital would also collaborate in providing solutions for their clients, including inter alia in the area of M&A opportunities in India and Japan, and will assist each other in distribution of their respective financial products through their networks. Reliance Capital would also support clients of SMTB in their supply chain financing and advisory needs in India. On the other hand, the Japanese firm would support Reliance Group across its various listed group companies by providing a wide range of financial and other services in Japan and Asia Pacific region. A leading financial services group, Reliance Capital has interests in diverse segments including asset management and mutual funds; life and general insurance; distribution of financial products. Sumitomo Mitsui Trust Group is Japan’s largest financial institution managing assets of $682 billion and with assets under custody of $1.8 trillion at the end of September 2014. In morning trade, shares of Reliance Capital were trading flat at Rs 463.30 a piece. PTI