Mumbai, Oct. 6 -- Jio Financial Services and Allianz Europe B.V. have each invested Rs. 3.2 bn in Jio Allianz General Insurance, their 50:50 joint venture, according to a company disclosure on Wednesday. The combined investment in the general insurance venture is Rs. 6.4 bn.
The partners subscribed to and were allotted 320,050,000 equity shares in the joint venture through a rights issue. The shares, each carrying a face value of Rs. 10, were issued for cash at par, with each partner receiving 320,050,000 shares.
The proceeds will be used to fund Jio Allianz General Insurance's business operations. Following the latest subscription, Jio Financial Services' aggregate investment in the venture has reached Rs. 3.75 bn. Its latest contribution constitutes a related-party transaction, the company said, and was completed on an arm's-length basis.
No promoter, promoter group or other group company of Jio Financial Services has any interest in the investment, according to the disclosure. The company also said the transaction does not require governmental or regulatory approval.
Jio Financial Services had announced in May that it had incorporated the venture with Allianz Europe B.V. The entity was formed to conduct general insurance business in India, including health insurance, subject to regulatory approvals, following execution of a joint venture agreement. The venture's activities therefore remain contingent on the required approvals.
As part of the initial subscription, Jio Financial Services invested Rs. 49.5 mn for 4,950,000 equity shares with a face value of Rs. 10 each. That investment gave the company a 50 per cent stake, with the latest issue maintaining the equal ownership structure between the two partners.
Published by HT Digital Content Services with permission from Construction World.