Engineering giant Larsen & Toubro (L&T)’s proposed general insurance joint venture with United States based insurance firm Travelers has hit roadblocks with no agreement on issues like management control and financial arrangement.
The general insurance company had to be a 74:26 per cent joint venture between L&T and Travelers, which is the second largest underwriter of commercial property casualty insurance in the US.
Sources close to the development said Travelers had approached Reliance Capital and evinced interest in acquiring 26 per cent stake in its non-life insurance subsidiary Reliance General Insurance. A senior Reliance Capital official confirmed this but said his group had no interest in the deal. However, Reliance Capital is interested in divesting 10 to 26 per cent stake in Reliance Life Insurance, this could be through an IPO or stake sale to strategic investors. Travelers officials refused to comment.
An industry expert who did not want to be identified said Travelers appeared to be keeping its options open, including a new joint venture or a stake in an existing company.
“Since Reliance Capital is not interested in selling stake in Reliance General, Travelers may again renegotiate with L&T and the two could be back,” he said.
“We cannot talk about our insurance plans now as it is in a preliminary stage. Our plans may firm up in another three months,” said L&T’s chief financial officer YM Deosthalee.