Lakshmi Vilas Bank to allot nearly 5% equity shares to Indiabulls Housing Finance on preferential basis

It is expected that the relevant date (of allotment of equity) could be by the end of April 2019, Lakshmi Vilas Bank said

Press Trust of India April 16, 2019 07:41:52 IST
Lakshmi Vilas Bank to allot nearly 5% equity shares to Indiabulls Housing Finance on preferential basis
  • Earlier this month, the private sector lender had announced its merger with Indiabulls Housing Finance Ltd in a share-swap deal

  • LVB approved merger with IBHL in which shareholders of the bank will get 14 shares of IBHL for every 100 shares they hold

  • The combined entity, with employee strength of 14,302, will have a loan book size of Rs 1.23 lakh crore

New Delhi: Lakshmi Vilas Bank (LVB) Monday said it plans to allot nearly 5 percent equity shares on a preferential basis to Indiabulls Housing Finance Ltd.

However, it is not to be considered as a capital raising means before their proposed merger.

"The bank is proposing to make a preferential allotment to Indiabulls Housing Finance to the extent of 4.99 percent of the bank's post-money equity," LVB said in a statement.

It is expected that the relevant date (of allotment of equity) could be by the end of April 2019, it added.

Lakshmi Vilas Bank to allot nearly 5 equity shares to Indiabulls Housing Finance on preferential basis

Representational image. Reuters.

"This does not presuppose any capital augmentation on account of the proposed merger, which would only conclude after receipt of all regulatory approvals," it added.

Earlier this month, the private sector lender had announced its merger with Indiabulls Housing Finance Ltd (IBHL) in a share-swap deal with an intent to create a combined entity with larger capital base and wider geographical reach.

The board of LVB has approved the merger with IBHL in which shareholders of the bank will get 14 shares of IBHL for every 100 shares they hold.

The combined entity, with employee strength of 14,302, will have a loan book size of Rs 1.23 lakh crore for the first nine-month period of 2018-19.

After the proposed merger, IBH will get access to low-cost deposits, geographical diversification and expanded client-base and cross-selling opportunities.

However, the Reserve Bank (RBI) is yet to examine the merger proposal of the bank and the NBFC.

LVB shares closed 1.65 percent down at Rs 89.20 on BSE, while IBHL closed 0.55 percent up at Rs 834.65 apiece.

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