ICICI Bank today said the joint venture agreement between it and Fairfax Financial Holdings Ltd has been terminated ahead of the IPO of ICICI Lombard General Insurance Company — a JV between the two entities. “In pursuance of the proposed initial public offering (IPO)), we inform you that the joint-venture agreement dated October 4, 2000 (as amended/restated from time to time) entered among Fairfax Financial Holdings and ICICI Bank has been terminated pursuant to a termination agreement executed on July 3, 2017,” ICICI Bank said in a regulatory filing.
A Termination Agreement is a customary provision for an IPO. The agreement is executed for the protection of the parties in the event of non-completion of the proposed IPO on or before a mutually agreed date.
Earlier in June, ICICI Bank had informed selling a part of ICICI Bank shareholding in ICICI Lombard General Insurance ahead of the proposed IPO. With the proposed IPO, ICICI Lombard is all set to become the first private sector general insurer in the country to go public.
Formed in 2001, ICICI Lombard is a joint venture between country’s largest private sector ICICI Bank and Prem Watsa-run Fairfax Financial Holdings with a valuation of Rs 20,300 crore. ICICI Bank held 65 per cent in the JV while Fairfax Financial Holdings retained the remaining 35 per cent.
ICICI Bank stock closed 0.15 per cent down at Rs 289.45 on BSE.