IHF will hold 90.5 pc equity holding in merged entity
MUMBAI: In an interesting turn of events, the board meeting of Lakshmi Vilas Bank (LVB) held on Friday (May 3) led to the decision to merge Indiabulls Housing Finance (IHF) and its fully owned subsidiary, Indiabulls Commercial Credit Ltd (ICCL) into Lakshmi Vilas Bank (LVB) and not the other way round as had been agreed on earlier.
However, the share exchange will remain in line with the previously agreed ratio. The shareholders of Indiabulls group will receive 7.143 equity shares of LVB with face value of Rs10 for each share of the former with a face value of Rs2.
The deal will see Indiabulls Housing Finance (IHF) holds approximately 90.5 per cent of the post-merger enhanced equity capital of the merged entity and the shareholders of L VB will hold approximately 9 .5 per cent of the post-merger enhanced equity capital of the merged entity.
It was felt that given the regulatory framework governing new private banks, it’s prudent to conduct the lending business under LVB being a full-fledged bank.
LVB will issue equity shares to Indiabulls on the record date and no separate consideration will be paid for the transfer of its fully owned subsidiary, ICCL, as IHF and its nominees hold l 00 per cent of the shares of ICCL.
“Also, upon the scheme becoming effective, all the shares of the ICCL shall stand cancelled without any further act, application or deed,” an official statement issued by LVB said.
The board meeting of LVB held on Friday (May 3) decided to amend the scheme of amalgamation, with the consent of Indiabulls management, leading to the merger of Indiabulls Housing Finance and its wholly owned subsidiary lndiabulls Commercial Credit Ltd (ICCL) merging into Lakshmi Vilas Bank.