Indian banking and financial services company ICICI Bank has terminated its general insurance joint venture agreement with Canada-based Fairfax Financial Holdings.
The announcement to sever the agreement over the ICICI Lombard General Insurance Company was made public when ICICI proposed to sell a part of its shareholding in ICICI Lombard through a public offering. A termination agreement was signed on Monday (July 3), the bank confirmed in a stock exchange notice.
“The termination agreement has customary provisions for protection of parties in the event of non-completion of the proposed initial public offering on or before a mutually agreed date,” the notice read.
Search and compare product listings for Business Insurance from specialty market providers here
The Hindu Business Line reported that as of March 2017, ICICI Bank had 63.31% ownership interest in ICICI Lombard.
In May, Fairfax Financial sold 12.18% of ICICI Lombard to a number of investors, including Warburg Pincus, Tamarind Capital Pte and IIFL Special Opportunities Fund, to the tune of ₹2,473 crore (approximately $494 million).
It is believed that Fairfax’s reduction of its stake in ICICI Lombard is a part of its plan to start a new general insurance joint venture in India.
The Insurance Regulatory and Development Authority of India (IRDAI) has already given its initial approval to the Canadian company’s new venture.
Related stories:
Canadian insurer finds buyers for stake in $3.15 billion Asian insurance co
Fairfax gets initial nod for second general insurance JV in India
