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The board of Axis Bank today approved merger of the financial services business of Enam Securities with itself through a share swap deal.
The identified business verticals of Enam Securities will be merged with itself under a scheme of arrangement,Axis Bank said in a statement.
As part of the agreement,Enam shareholders will be issued 1.37 crore equity shares on the basis of the agreed swap ratio of 5.7 equity shares of the bank for every 1 equity share of Enam,8221; it said.
As part of the deal announced in November,2010,the bank agreed to acquire investment banking unit,corporate advisory services and equity distribution arm of Enam Securities.
However,the asset management company and the insurance broking arm were not part of the deal.
The statement further said that immediately upon the completion of merger,the bank will sell the Enam8217;s securities business to Axis Securities and Sales ASSL,the bank8217;s wholly-owned subsidiary,by way of sale under the said scheme of arrangement.
8220;ASSL shall pay the bank a cash consideration of approximately Rs 274 crore,which represents the book value of the Enam8217;s securities business8221; it said.
The above actions are proposed to be undertaken pursuant to a scheme which was tabled and approved by the board at its meeting,and which was formulated in compliance with the conditions prescribed by the Reserve Bank of India,it said.
The scheme is subject to the receipt of necessary approvals under applicable law,including the approval of the shareholders and creditors of the bank,Enam and ASSL,the relevant High Courts and the relevant regulators,it added.
Axis Bank is one of the leading private sector lenders of the country with a network of about 1,000 branches spread across the country.
Enam Securities,which was set up in 1984 as a financial services provider,is a privately held company.
Under the deal,Enam8217;s shareholders Vallabh Bhansali,Manish Chokhani,Jagdish Master and Nimesh Shah will get 5.7 shares of Axis Bank for one share of Enam.
Bhansali will also be inducted on the Board of Axis Bank as an independent director,while Chokhani will be the Managing Director and CEO of the newly formed entity.
