Canada's Sun Life Financial has proposed to hike its stake in the insurance joint venture Birla Sun Life Insurance (BLSI) to 49 per cent from 26 per cent at an investment of Rs 1,664 crore. BLSI is majority-owned by Aditya Birla Nuvo Ltd (ABNL) and post deal, it would continue to hold the controlling stake in the joint venture at 51 per cent.

Proceeds from the stake sale in BSLI will reduce the net debt of ABNL substantially. Coupled with the free cash flow generation from divisions, the standalone balance sheet of ABNL will stand strengthened to support its growth plans, ABNL said in a filing made to the stock exchanges.

According to the detailed Frequently Asked Questions (FAQs) about the deal, ABNL's endeavor is to create long term value for all the stakeholders by investing in the promising sectors. Besides, ABNL has identified promising investment opportunities in the Health Insurance, Payment Banks and Solar Power sectors which will need funding support equivalent to ABNL's 51 per cent stake, balance being funded by the respective joint venture partners, it said.

It further said that in the past few years, the company has made substantial investments in the NBFC business which has now become a large player and a valuable franchisee and recently started Housing Finance business. ABNL has capital commitment to the tune of Rs 600 crore for 2015-16 towards NBFC and Housing Finance businesses, it said in the FAQs.

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