PNB Asks PNB Housing Finance To Restructure Fundraising Plan
PNB writes to PNB Housing asking for fund raising plan to be restructured.
Government-owned Punjab National Bank has written to PNB Housing Finance Ltd, asking it to consider restructuring the Rs 4,000-crore fundraising plan. The fundraising plan, announced on May 31, would have pruned PNB's stake in the housing finance company to around 20% from 32.6% currently and raised the shareholding of private equity firm Carlyle to over 50%.
According to an exchange notification on Wednesday, PNB Housing Finance said that it had received a letter from its parent PNB on July 4.
According to the exchange notice, the PNB board met on July 3, considered the opinion of a law firm, and decided to ask for the deal to be reconsidered. The decision was taken considering a letter by the Securities and Exchanges Board of India dated June 18.
The markets regulator found that the valuation of shares undertaken by the company as part of the deal was "ultra vires" of Articles of Association.
The regulator also said that the issue should not be acted upon till the company undertakes the valuation of shares as per prescribed rules using an independent registered valuer, in compliance with existing laws and the Articles of Association.
PNB Housing Finance then approached the Securities Appellate Tribunal. While the tribunal was expected to announce its decision on July 5, the matter was adjourned for a week.
The housing finance company's board then met on July 5 and 6 to consider the view shared by PNB, but decided to not take any action, since the matter is currently subjudice.
"...the board will await the SAT’s order on this issue. As communicated earlier, the next hearing before SAT is scheduled for Monday, July 12, 2021," the exchange notification said.
On May 31, PNB Housing Finance had announced a preferential issue to a clutch of investors led by Pluto Investments, an entity connected to Carlyle. The board had arrived at a price of Rs 390 per share for the purposes of the preferential allotment through a valuation process it had undertaken. Former HDFC Bank chief executive Aditya Puri's family investment vehicle Salisbury Investments would also participate in the issue. Puri, also an advisor to the Carlyle Group, would join the board.