HDFC sells 26% of General Insurance

Housing Development Finance Corporation Ltd (HDFC) has informed that the Corporation has agreed to sell 3,25,00,000 equity shares of Rs 10 each of HDFC General Insurance Company Ltd (HGICL) representing 26% of the paid-up equity capital to ERGO INTERNATIONAL AG, subject to receipt of requisite approvals. Consequent to the said sale, the Corporation would hold 74% of the total paid-up equity capital of HGICL.

In this regard the Company has issued the following press release:

"HDFC Ltd & Germany's ERGO join forces in a general insurance joint venture. Under the agreement, the entity for international business, ERGO International AG, will acquire a 26% share in HDFC General Insurance Ltd., the remainder being held by HDFC. With the joint venture, two strong partners with an excellent strategic, operational and cultural fit have come together to form a powerful venture in the Indian general insurance market.

In the presence of German Chancellor Dr. Angela Merkel and Indian Prime Minister Dr. Manmohan Singh, Mr. Deepak Parekh, Chairman of the Board of HDFC and Dr. Nikolaus von Bomhard, CEO of ERGO's parent Company, the Munich Re Group, will sign a joint declaration in New Delhi on October 30, 2007. The new joint-venture Company will be named HDFC ERGO General Insurance Ltd. and will headquartered in Mumbai.

The new partnership enables HDFC Ltd to successfully grow their existing general insurance operations and further leverage their outstanding brand and distribution strength. Entering the joint venture with HDFC Ltd. underlines the ERGO Insurance.

Group's international expansion strategy and offers a direct entry into the Indian general insurance market. Andreas Kleiner, Member of Board of ERGO International AG responsible for Asia, expects a very successful and longstanding cooperation with HDFC.

The transaction is subject to regulatory approval by the Indian insurance regulatory authority IRDA. HDFC Ltd and the ERGO intend to complete the proposed transaction by the end of 2007. Both parties have agreed that the purchase price of the transaction will remain confidential."