Fairfax plans to exit India’s IIFL Finance to unlock funds for IDBI purchase, sources say

ملخص مفصل

Fairfax’s $320-million stake in IIFL could be put toward its acquisition of a majority interest in the Indian bank

Fairfax Financial Holdings FFH-T plans to sell its nearly 11-per-cent stake in Indian non-bank lender IIFL Finance, two people familiar with the discussions said on Wednesday.

The sale is intended to unlock funds for Fairfax’s purchase of a 60-per-cent stake in IDBI Bank from India’s federal government and the Asian country’s largest insurer. The IDBI deal, valued at 528.78-billion rupees (US$5.56-billion), is among India’s largest cross-border banking transactions.

To fund part of the deal, Fairfax is looking to complete the IIFL Finance exit “soon,” one of the people said.

At the current market price, Fairfax’s stake in IIFL Finance will be worth roughly 30-billion rupees or US$320-million.

Fairfax will likely sell its stake in the secondary markets and the controlling shareholders of the non-bank lender do not intend to buy the stake, one of the persons said.

Both people declined to be identified as the discussions are confidential.

Fairfax and IIFL did not immediately respond to e-mails seeking comment.

Fairfax bought a nearly 22-per-cent stake in IIFL Finance in 2015, but the stake has since been diluted to 11 per cent following an expansion of the non-bank lender’s capital base.

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