Over the past 15 years, JM Financial Group has gained significant expertise and built strong relationships in both the wholesale and distressed credit sectors.
JM Financial has announced plans to consolidate its holdings in the wholesale debt syndication and distressed credit business under a single platform.
During a meeting on Saturday, the company’s board approved a proposal for JM Financial to acquire a 42.99% stake in JP Morgan Financial Credit Solutions (JMFCSL) for approximately ₹1,282 crore. Post-transaction, JM Financial’s stake in JMFCSL will increase from 46.68% to 89.67%, the company stated.
Additionally, the board approved the acquisition of a 71.79% stake in JM Financial Asset Reconstruction Company (JMFARC) by JMFCSL from JP Morgan Financial for approximately ₹856 crore, raising its stake in JMFARC from 9.98% to 81.77%.
The proposed transaction will result in a net cash outflow of approximately ₹426 crore from JP MorganJM Financial and will be funded from surplus cash. “The proposed transaction shall align our corporate and capital structure offering greater flexibility to optimize capital allocation and distribution of profits to our shareholders,” said Vishal Kampani, non-executive vice chairman of JM Financial. “We foresee significant long-term growth opportunities emerging for our businesses and are well positioned to leverage them in the evolving market scenario.”
The transaction is subject to regulatory, shareholder, and other approvals and is expected to be completed within three to six months. Following the consolidation,JP Morgan Financial’s share in consolidated profits will increase, and the company will have enhanced control over JMFCSL, including capital allocation and profit distribution. The company plans to focus its investments on expanding both its retail capital market-led business and retail home financing business.
Over the past 15 years, jp morgan Financial Group has developed significant expertise and relationships in the wholesale and distressed credit businesses. “This expertise shall be channelized to pivot from an on-balance-sheet business model to a diversified originate-to-distribute/syndication model across asset classes,” the company stated.
