Punjab National Bank (PNB) on Thursday said it has terminated the share purchase agreements (SPAs) it had made with Varde Holdings and General Atlantic for a sale of 13 per cent stake in PNB Housing Finance, which had been announced on March 29.
According to latest shareholding pattern on the BSE, PNB holds a 32.79 per cent stake in the housing finance firm. Had the deal gone through, PNB’s stake would have reduced by 13 per cent to 19.79 per cent.
It was announced earlier that PNB would enter into an agreement for sale of over 1.08 crore equity shares held in PNB Housing Finance to General Atlantic Group at a per share price of Rs 850 a piece aggregating to Rs 925.80 crore. It had also announced a similar deal with Varde Holdings.
The entire transaction would have seen PNB off-loading a 13 per cent stake in PNB Housing Finance for Rs 1,851.60 crore to the two parties. However, it seems the bank did not go ahead as it didn’t receive the approval from the central bank for the transaction involving General Atlantic.
In a stock exchange filing, PNB indicated that for the transaction with General Atlantic, the Reserve Bank of India (RBI) did not grant exemption from application of pricing guidelines under the Foreign Exchange Management (Transfer or Issue of Security to a Person Resident Outside India) Regulations, 2017. As part of the conditions, the transaction required approvals from the Competition Commission of India (CCI), the National Housing Bank (NHB) and RBI.
Communications from the CCI and the NHB regarding the approval of the transaction had already been received, the public sector bank indicated.
Since all conditions precedent to completion of the transaction were not fulfilled and the completion did not occur as on May 15 — which was the long stop date under the SPA — the SPA stands terminated with immediate effect, PNB said.
At the same time, PNB and Varde Holdings mutually agreed to terminate the SPA. The bank did not attribute any other reason for the cancellation of the deal with Varde Holdings. With the deal falling through, PNB said it will continue to be the sole promoter of the company and stay strategically invested in the firm.
“PNB strongly believes in the growth story of the company, and will continue to support its business and management in pursuing their growth plans. Further, PNB will continue to provide branding support as long as PNB remains the promoter of the company,” the state-owned lender stated in a stock exchange filing.
The announcement hit stock exchanges after market hours on Thursday. Shares of PNB closed Thursday’s session down 1.16 per cent, at Rs 81.15 a piece while shares of PNB Housing Finance closed flat at Rs 758.75.