(Bloomberg) -- Reliance Capital Ltd. has called off a sale of its general insurance unit to Hero Fincorp, forcing embattled Indian tycoon Anil Ambani to look for options as he seeks to reduce debt, people familiar with the matter said.
The talks for selling Reliance General Insurance Ltd., which were at an advanced stage, ended after the shadow financier struggled to raise funds for the acquisition, said the people, asking not to be named as the information is not public. Ambani's group is looking for alternatives for the insurance asset including reaching out to other potential buyers, the people said.
The sale of the fully-owned insurance unit is crucial for Ambani as he steps up efforts to cut his group's debt that has ballooned to about 939 billion rupees ($13 billion) at four of its biggest units. “Reliance Group is committed to meeting all future debt obligations,” Ambani said in a rare conference call in June, and becoming “capital light, with bare minimal debt.”
A spokesman at Reliance Capital declined to comment, while a representative for Hero FinCorp didn't respond to an email and phone calls seeking comment.
Hero Fincorp was in advanced talks to buy the insurer at a valuation of about 60 billion rupees ($860 million), The Economic Times reported in May, citing unnamed sources.
To read more about AnilAmbani's asset sale plans to pare debt
--With assistance from Anto Antony.
To contact the reporters on this story: Baiju Kalesh in Mumbai at bkalesh@bloomberg.net;P R Sanjai in Mumbai at psanjai@bloomberg.net
To contact the editors responsible for this story: Fion Li at fli59@bloomberg.net, ;Sam Nagarajan at samnagarajan@bloomberg.net, Anto Antony
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