SEBI exempts govt from making open offer to J&K Bank's shareholders; state to hike stake in lender by 8.95%

Markets regulator SEBI has exempted Jammu and Kashmir government from making an open offer to shareholders of Jammu & Kashmir Bank following proposed equity infusion that would hike its stake in the lender by 8.95 percent

Press Trust of India March 20, 2020 16:41:14 IST
SEBI exempts govt from making open offer to J&K Bank's shareholders; state to hike stake in lender by 8.95%

New Delhi: Markets regulator SEBI has exempted Jammu and Kashmir government from making an open offer to shareholders of Jammu & Kashmir Bank following proposed equity infusion that would hike its stake in the lender by 8.95 percent.

The order comes after the bank filed an application in February on behalf of its promoter -- Government of Jammu & Kashmir -- seeking exemption from applicability of SAST (Substantial Acquisition of Shares and Takeovers) or Takeover Regulations.

The government has proposed to infuse Rs 500 crore in the lender against allotment of equity on a preferential basis in favour of it.

SEBI exempts govt from making open offer to JK Banks shareholders state to hike stake in lender by 895

Representational image. Reuters

The government, presently, holds 59.23 percent stake in Jammu & Kashmir Bank, and the proposed allotment of 15,65,92,546 equity shares of the lender would increase its stake by 8.95 percent to 68.18 percent.

The government's holding will increase by more than 5 percent during the financial year 2019-20, mandating an open offer under the Takeover Regulation.

Besides, the public shareholding in the bank will decrease from 40.77 percent to 31.82 percent subsequent to the proposed acquisition.

In an order passed on Wednesday, the Securities and Exchange Board of India (SEBI) said there would be no change in management control post equity infusion in the bank, and the proposed infusion of additional capital will be utilised to improve capital adequacy and to fund general business needs of the bank.

"There will be no change in control of the target company (Jammu & Kashmir Bank) pursuant to the proposed acquisition as the change will only be in the quantum of holding the shares by the proposed acquirer/promoter (government)," it said.

Accordingly, the regulator granted an exemption to the government from complying with the requirements of Takeover Regulations.

Updated Date:

Subscribe to Moneycontrol Pro at ₹499 for the first year. Use code PRO499. Limited period offer. *T&C apply

also read

Kashmir violence: Army kids needn’t worry about cases filed against parents; security forces are never prosecuted in Valley
India

Kashmir violence: Army kids needn’t worry about cases filed against parents; security forces are never prosecuted in Valley

The army children may feel offended at the fact that FIRs are filed against soldiers, but based on Government of India data on FIRs filed and actions taken, there is no justice for Kashmiris in India

Jammu and Kashmir cabinet reshuffle updates: Kavinder Gupta replaces Nirmal Singh as deputy CM
Politics

Jammu and Kashmir cabinet reshuffle updates: Kavinder Gupta replaces Nirmal Singh as deputy CM

The much-awaited reshuffle of the Jammu and Kashmir coalition ministry will be done on Monday, with Governor NN Vohra extending an invitation for the event