Chennai, March 30 (Inditop.com) City-based Murugappa group has decided to buy out DBS Bank’s 37.48 percent stake in Cholamandalam DBS Finance Ltd (Chola DBS), a non-banking finance company (NBFC).
Two Murugappa group companies – Tube Investments of India Ltd (TI) and New Ambadi Estates Pvt Ltd – have entered into a share purchase agreement (SPA) with DBS Bank, Singapore, for the purchase of 2,48,88,473 equity shares of Rs.10 each of Chola DBS at Rs.91 per share.
The purchase price is 1.2 percent premium to Monday’s closing price of Chola DBS share in the Bombay Stock Exchange.
TI will purchase 1,75,82,000 shares of Chola DBS while New Ambadi will acquire the balance.
Post acquisition, Chola DBS will become a subsidiary of TI as the later’s holding in the former will go up to 57.41 percent.
In a filing with National Stock Exchange Tuesday, TI has also said that the SPA provides for the purchase of one percent fully convertible cumulative preference shares (FCCPS) of Chola DBS of Rs.100 each at face value.
According to TI, the acquistion is exempted under SEBI regulation from making open offer for public shareholders.
The transaction is expected to be completed before Apr 12.
The change in the joint venture will be reflected in the names of the company and its subsidiaries and their respective Boards upon completion of the transaction and necessary formalities.
Meanwhile, TI has decided to seek shareholders’ nod to invest Rs.150 crore in one percent FCCPS of Rs. 100 each of Chola DBS and another Rs.25 crore in the shares of Financiere C10, the company’s subsidiary in France.
