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The Board of Max Financial Services has approved a transaction which will allow Mitsui Sumitomo Insurance (MSI) to swap 20.57% of its shareholding in Max Life insurance with 21.87% stake in Max Financial Services.
This will enable the Company to simplify the shareholding structure in its subsidiary and have more flexibility to attract strategic investments in Max Life in the future and yet maintain its significant majority ownership.
The transaction will also provide MFS the option to purchase from MSI its balance shareholding in Max Life for cash at a price of Rs 85 per share.
The transaction structure will involve MSI subscribing 75,458,088 shares of MFS having a par value of Rs. 2/- each at a price of Rs. 565.11 per share aggregating to 21.87% of the paid-up equity share capital of the Company on the date of allotment of the aforesaid fresh shares.
In consideration, MFS will receive 394,775,831 shares of Rs. 10/- each from MSI at a price of Rs. 108.02 per share translating into 20.57% stake of MLIC. Pursuant to this, the equity stake held by MFS in Max Life will increase to 93.10%.
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