PNB advises Housing arm to rejig Carlyle deal as per Sebi order
Punjab National Bank (PNB) has advised its housing arm, PNB Housing Finance (PNB HFL), to restructure the fundraising deal with investors led by the Carlyle Group as per the recent directive by Securities and Exchange Board of India (SEBI). However, the mortgage lender has decided to wait for the Securities Appellate Tribunal’s (SAT) order expected to be pronounced on July 12.
A day before the scheduled hearing of SAT on July 5, PNB wrote a letter to its housing arm asking to take cognizance of the June 18 directive issued by Sebi, and to reconsider restructuring the contours of the deal in line with the market directive’s order. The letter by PNB conveyed the decision taken by its board on July 3 based on legal opinion obtained from a law firm.
After receiving the PNB letter, the board of PNB HFL met on July 5 and July 6, and by a majority resolution decided to await the SAT’s order as the matter relates to interpretation of law, and is subjudice, the mortgage lender said in a statement.
Last month, PNB Housing had announced its capital raising plan that involved the preferential allotment of shares worth Rs 3,200 and Rs 800 crore worth of warrants to a clutch of investors led by the Carlyle Group. Proxy advisory firm Stakeholders Empowerment Services (SES) had called the deal “unfair” to public shareholders of the company and shareholders of PNB. Just a few days before the proposal could go for a vote, SEBI directed the PNB Housing to stop preferential allotment of shares unless the valuation is done by an independent valuer.
The mortgage lender then moved SAT challenging the regulator’s directive, and the tribunal allowed the company to conduct its scheduled EGM with the caveat that the outcome of the vote will not be disclosed. The final hearing for the matter is scheduled on July 12.
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