Moneycontrol Bureau
Shares of Max Ventures & Industries surged 18 percent in early trade Tuesday after the board approval for stake sale to a subsidiary of New York Life Insurance Company.
"The board of directors of the company, on January 9, made a preferential offer, subject to shareholder approval, to issue common stock to a subsidiary of New York Life Insurance Company," the company said in its filing.
A subsidiary of New York Life Insurance Company will acquire a 22.51 percent equity stake in Max Ventures at an offer price of Rs 78 per share aggregating to Rs 121 crore on a diluted basis. After this deal, it will be entitled to one nominee director to the board of Max Ventures.
New York Life is the largest mutual life insurance company in the United States and one of the largest life insurers in the world, with more than USD 500 billion under management.
Max Ventures said the board also proposed an allotment of share warrants to the promoter group equivalent to 4.76 percent of the post-issue share capital of the company on a fully diluted basis assuming full conversion of the warrants.
These share warrants will be issued at Rs 78 per warrant aggregating to Rs 26.9 crore and will be convertible into equivalent equity shares within 18 months, taking the shareholding of the promoter group in Max Ventures to around 38.02 percent on fully diluted basis.
New York Life and the Max Group have a longstanding association. In 2001, the two entities partnered to set up Max New York Life. In 2012, New York Life sold its 26 percent stake in Max New York Life to Mitsui Sumitomo Insurance Co., after which the life insurance company was renamed Max Life.
Max Ventures is the newest entity in the Max Group of companies that came into existence after the erstwhile Max India Group was demerged into Max Financial Services, Max India and Max Ventures & Industries Limited.
The company has four distinct business verticals Max Speciality Films (manufacturing), Max Estates (real estate), Max Learning (education) and Max I (intellectual and financial support).
Other investors in Max Ventures include International Finance Corporation and Reliance Mutual Fund.
At 09:25 hours IST, the stock was quoting at Rs 77.20, up Rs 10.15, or 15.14 percent amid high volumes on the BSE.Posted by Sunil Shankar Matkar
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