INDIA: Bajaj Finserv announced on Tuesday, 22 October, that its joint venture partner, German-insurer Allianz, is considering exiting their life and general insurance businesses in India.

Allianz holds a 26% stake in both Bajaj Allianz General Insurance and Bajaj Allianz Life Insurance, while Bajaj Finserv controls the remaining 74%. Discussions are still in the early stages, and no formal proposals have been submitted to the boards of either company yet.

In a regulatory filing, Bajaj Finserv stated that Allianz is reviewing its global strategy and considering an exit from the partnership.

“Allianz has indicated that, in line with its strategic priorities, it is actively considering an exit from the joint ventures,” Bajaj Finserv reported.

Allianz, however, has committed to ensuring a smooth transition if it proceeds, focusing on minimising any disruptions to policyholders, employees, and business partners.

Bajaj Finserv, headquartered in Pune, India, is part of the Bajaj Group, one of the country’s largest and oldest conglomerates.

It operates across various sectors, including insurance, lending, wealth management, and investments.

The partnership between Bajaj Finserv and Allianz has led to the development of two major insurance businesses in India. Bajaj Allianz General Insurance is the third-largest insurer in the country by gross written premiums, and Bajaj Allianz Life Insurance continues to grow, managing assets exceeding Rs 1 lakh crore as of 31 March 2024.

If Allianz proceeds with its exit, it would entail a shift in brand ownership. Allianz has committed to supporting Bajaj Finserv through a seamless transition to the Bajaj brand, ensuring that the interests of key stakeholders, including policyholders, employees, and business partners, are protected.

Shares of Bajaj Finserv reacted to the news, falling nearly 1% to Rs 1,743.45 (US$20.74) per share by 1:30 pm on 22 October. While the potential implications of Allianz’s exit are still unfolding, its long-term impact on the businesses will become clearer in the coming months.

Separately, Allianz’s recent attempt to enter the Singapore insurance market has faced challenges.

Allianz had planned to purchase a 51% stake in Income Insurance, formerly NTUC Income, one of Singapore’s largest insurers.

However, the Singapore government blocked the acquisition due to concerns about NTUC Income’s social mission and potential deviation from cooperative principles. The decision followed public concerns that the deal could lead to a shift away from NTUC’s cooperative values.

In response to the halted acquisition, Allianz stated: “We respect the government’s position and will assess the situation with Income Insurance and NTUC Enterprise Co-operative.”

The company also emphasised its belief in the potential benefits of the partnership, adding, “We are convinced that partnering with Income Insurance, a company that shares Allianz’s values and commitment to customer excellence, will benefit Singapore’s customers and society.”

As Allianz considers its position in India, both markets and stakeholders are monitoring the developments closely. The potential move by Allianz comes at a time when the Indian insurance market is experiencing rapid growth, driven by increasing demand for both life and general insurance products.

Two companies have conditionally agreed to purchase Apollo Aquaculture Group’s (AAG) multi-storey fish farm in Lim Chu Kang for a fraction of its initial value.

The sale, which was reported by the Straits Times, came after the company, backed by Temasek Life Sciences, struggled financially and was placed under judicial management in May 2022.

The fish farm, owned by AAG’s subsidiary Apollo Aquarium, was built at a cost of S$65 million but has now been sold to local construction firm HPC Builders and Aquachamp, an investment holding company with ties to the fish farming industry. HPC Builders will acquire 70% of the equity, while Aquachamp will purchase the remaining 30%.

The acquisition price for HPC Builders is capped at S$3.5 million, significantly lower than the facility’s book value of S$44 million as of 31 March 2024.

This transaction remains subject to approval from the Singapore Food Agency (SFA). The SFA declined to comment on the matter when approached.

Apollo’s eight-storey fish farming facility, which began operations in 2021, was initially seen as a breakthrough in addressing Singapore’s land constraints for agriculture.

The farm had ambitious plans to produce up to 2,700 tonnes of fish annually, including hybrid grouper and coral trout. However, delays in the completion of the farm led to escalating costs and financial troubles, causing the facility to cease operations in early 2023, well short of its production targets.

The company’s financial difficulties resulted in AAG being placed under judicial management, a form of debt restructuring aimed at helping financially distressed but potentially viable companies avoid liquidation. The appointment of an independent judicial manager allowed AAG to attempt to reorganise its operations, but the sale of Apollo Aquarium’s fish farm became a necessary part of the restructuring process.

According to Tan Wei Cheong, Deloitte Singapore’s strategy, risks, and transactions partner, the delays in completing the fish farm severely impacted AAG’s revenue streams and led to its financial collapse. Tan declined to comment further on the sale process, as the agreement is still being finalised.

AAG has five subsidiary companies, but only Apollo Aquarium remains active. The other four subsidiaries, which include Cube 2 (a water technology firm), Aquaworld Tropical Fish (focused on ornamental fish), Smart Hatchery, and Apollo Marine Seafood, have all entered liquidation.

The sale of Apollo Aquarium is seen as a low-cost entry for HPC Holdings, HPC Builders’ parent company, into Singapore’s aquaculture sector. Aquachamp, described as an experienced fish farm operator, will take charge of the facility’s management and operations. HPC Holdings expressed optimism about the long-term profitability of the venture, highlighting the potential for full production capacity to generate steady income and broaden its revenue base.

Aquachamp’s registered address shares a location with Max Koi Farm, a nearby ornamental fish farm in Lim Chu Kang. The two entities are linked through Ng Chuen Guan, who serves as a director of both Aquachamp and AAG. Ng also owns nearly 2.9 million shares in AAG.

Temasek Life Sciences, a subsidiary of Singapore’s investment company Temasek, indirectly holds a significant stake in AAG through TLS Beta, which owns 33.1% of the company. The largest shareholder, Ng Yong Hock Capital, owns 55.1% of AAG’s shares. Despite Temasek’s involvement, the company declined to comment on the sale when approached by The Straits Times (ST).

AAG’s debts, as of March 2024, stand at around S$35.4 million, according to a filing by HPC Holdings. Cargill TSF Asia, the financial services arm of agricultural giant Cargill, is listed among the company’s creditors.