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Future Capital Holding and Centrum Capital Ltd have decided to part ways in their two equal joint ventures for foreign exchange money changing and travel solutions, and retail broking, portfolio management services and distribution of financial products.
In accordance with the mutually agreed rearrangement of share holding in the joint venture agreements, Centrum Capital Ltd (CCL) will buy out Future Capital Holdings' (FCH) 50 per cent stake in the FCH Centrum Direct Ltd (the forex money changing and travel solutions entity). FCH, in turn, will buy out CCL's 50 per cent stake in FCH Centrum Wealth Managers Ltd (the retail broking, portfolio management services and financial products distribution entity).
CCL will pay FCH Rs 100 crore for buying its stake in FCH Centrum Direct Ltd. Post the stake buy, this company will become CCL's wholly-owned subsidiary. FCH will pay CCL Rs 1 crore for buying its stake in FCH Centrum Wealth Managers Ltd.
Post the stake buy, this company will become a wholly-owned subsidiary of FCH.
In 2008, FCH had invested Rs 75 crore for the 50 per cent stake in FCH Centrum Direct Ltd. FCH had picked up 50 per cent stake in FCH Wealth Managers Ltd for Rs 25 crore.
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“We want to build an excellent broking and wealth management franchise brought to us through the acquisition of FCH Centrum Wealth Managers Ltd.
“Our exit from the second joint venture of FCH Centrum Direct Ltd is in line with our already stated strategy in this matter,” said Mr V. Vaidyanathan, Vice-Chairman and Managing Direct, Future Capital. The Centrum Group, according to Mr Rajnish Behl, Managing Director and Chief Executive Officer — Group Retail Financial Services, has drawn up a five-year roadmap for expanding its presence in the retail financial services space.
This will encompass forex money changing, travel solutions, broking, wealth management, non-banking finance company and international presence.
Shares of FCH on Friday ended a tad lower at Rs 136.80 (previous close: Rs 137.20) while CCL's shares ended up at Rs 1,228 (Rs 1,170) on the BSE.
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