MUMBAI : The Reserve Bank did not issue the final merger scheme for Lakshmi Vilas Bank (LVB) with DBS India on Friday as stated above and is likely to do so only next week, according to a central bank official.
While placing LVB under a moratorium and then issuing a draft merger scheme on November 17, the RBI had said it would issue the final merger scheme on November 20 (Friday) to help complete the resolution for the 94-year-old lender. years for December 16.
However, at 10pm on Friday, the central bank did not issue the final merger scheme. When contacted, a senior RBI official told PTI that the same would air early next week.
While promoters own only 6.8% of the bank (KR Pradeep owns 4.8% and the other three promoter families N Ramamritham, NT Shah and SB Prabhakaran collectively own 2%), retail shareholders own more than 45%. % of LVB shares.
Institutional investors, led by Indiabulls Housing, own just over 20%.
The other institutional investors are Prolific Finvest (3.36%), Srei Infra Finance (3.34%), Capri Global Advisory Services (2%), MN Dastur & Co (1.89%) Capri Global Holdings (1.82 %), Trinity Alternative Investment Managers (1.61%), Boyance Infrastructure (1.36%) and LIC (1.32%).
They all run the risk of losing every penny of their investment under the current merger scheme.
Larger promoter KR Pradeep earlier in the day told PTI that he would await RBI’s final merger scheme before finalizing the future course of action. Pradeep also said that he has already presented his objections and suggestions to obtain some value for his investment.
Similarly, an Indiabulls official, whose offer to take over LVB was rejected by the RBI in October 2019, told PTI that the company’s board was discussing the issue and, after obtaining the final merger scheme , I would decide whether to challenge him or not.
Pradeep had said the four promoters could also approach market regulator Sebi to stop the automatic delisting of LVB shares and the denial of any equity value of their holdings.
On November 17, shortly after placing the cash-strapped lender under a month-long moratorium, the Reserve Bank unveiled a draft merger scheme under which DBS India will infuse ₹2,500 crore of capital in LVB.
According to the draft plan, the entire paid-up share capital of LVB will be canceled.
“On and from the date indicated, the total amount of paid-up share capital and reserves and surplus, including balances in the transferor bank’s equity / securities premium account, will be canceled,” the RBI had said, but added that the final outline could be different incorporating objections and suggestions from shareholders.
Since the announcement, LVB shares have lost up to 35 percent of their value. They closed Friday’s session down 10 percent to ₹9 on BSE.
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