Canada's Fairfax Financial Holdings is planning to exit its nearly 11% stake in IIFL Finance as it looks to raise funds for its proposed acquisition of a controlling stake in IDBI Bank.
Reuters citing two people familiar with the discussions reported that Fairfax is looking to complete the sale soon. The proposed stake sale is aimed at unlocking capital for Fairfax's purchase of a 60% stake in IDBI Bank from the Indian government and Life Insurance Corporation of India (LIC), the country's largest insurer, according to the report.
Fairfax first invested in IIFL Finance in 2015, acquiring a stake of nearly 22% in the company. Its holding has since been diluted to around 11%.
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The potential exit comes days after IIFL Finance announced plans to expand its capital base through an investment by US-based private equity firm Blackstone. Under the arrangement, Blackstone will acquire a 16% equity stake in IIFL Finance through convertible shares and warrants.
(This is a developing story)
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