Future Enterprises’ sale of its stake in the general insurance joint venture with Italy’s Generali has hit a roadblock after an Indian court blocked the deal, Reuters reported citing sources. 

The deal is facing a legal challenge from IDBI Trusteeship, which is representing a group of foreign bondholders. 

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In January 2022, Future Enterprises signed an agreement to sell a 25% stake in Future Generali India Insurance (FGII) to the Italian insurer for around €145m.

The bondholders had subscribed to Future Enterprises’ entities that had defaulted. 

They had rights, which mandated Future Enterprises to not dilute its stake in Future Generali, one of the sources said.

After hearing IDBI’s plea, a Mumbai city civil court has ordered Future Enterprises to hold the stake sale until 10 March 2022.

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Notably, before IDBI reached out to the court it raised its concerns with Future, which did not fetch any response, the news agency said citing the court order.

The news comes as the Future is stuck in a legal dispute with Amazon over the sale of its retail operations. 

Future had planned to use the proceeds from insurance asset sales to support its retail operations that have suffered due to the Covid-19 pandemic. 

If the deal materialises, Generali will hold about 74% in FGII and capitalise on the growth opportunities offered by the Indian market.

At the time, Generali also brokered a deal worth €26m to buy about a 16% stake of Industrial Investment Trust Limited (IITL) in Future Generali India Life (FGIL).