Experts have raised questions on the transaction between PNB Housing Finance and US-based private equity firm Carlyle. Information is being given here on this deal and the objection of the capital market regulator SEBI regarding it.
What is the deal?
The board of PNB Housing Finance late last month approved preferential allotment of shares and warrants to certain firms, including Carlyle. These firms include General Atlantic, Salisbury Investments Pvt Ltd and Alpha Investments. Rs 4,000 crore is to be raised through this deal.
Aditya Puri, former chief executive officer of HDFC Bank, is associated with Salisbury Investments, a family investment firm involved in the deal.
Of this amount, Rs 3,200 crore will be raised through equity shares and Rs 800 crore by issue of warrants. The allotment has been made at a price of Rs 390 per share/warrant as against the current market price of the company’s shares at Rs 525.
After this deal, Carlyle will become a majority shareholder in the housing finance company and the actual promoter Punjab National Bank’s stake will come down to around 20 per cent from 32.64 per cent at present.
Why did SEBI take the step of stopping the deal?
SEBI has barred PNB Housing Finance from making preferential allotment of shares and warrants. SEBI has said that the resolution proposed for this is in complete violation of the Articles of Association of the company and the deal cannot proceed until the allotment price is decided by an Independent Registered Valuer.
The company has challenged this decision in the Securities Appellate Tribunal, which has allowed the company to conduct the voting of shareholders on resolution on June 22. However, the company has been barred from declaring the result of voting till the final order in this matter. The tribunal will hear the matter on July 5 for disposal.
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