IFC to pick up nearly 10 per cent in Cholamandalam DBS Finance for Rs100 crore
05 April 2010
International Finance Corporation (IFC), the private lending arm of the World Bank, is investing Rs100 crore to pick up a 10 per cent stake in Cholamandalam DBS Finance.
The development comes almost a week after Murugappa group companies, Tube Investments and Ambadi Private Estate, bought out the entire 37.5 per cent stake of its joint venture partner, DBS Bank, in the non-banking finance company, for around Rs376 crore.
The board of directors of Cholamandalam DBS Finance Ltd, at its meeting held on 3 April 2010, recommended an increase in the authorised share capital of the company from Rs400 crore to Rs420 crore consisting of 120 million equity shares of Rs10 each and 30 million redeemable preference shares of Rs100 each, the company said in a filing with the Bombay Stock Exchange (BSE).
The board also approved amendments to the memorandum and articles of association of the company accordingly, subject to the approval of shareholders, the company said in its filing.
The company proposes to issue 10.89 million equity shares of Rs10 each at Rs92 per share aggregating to Rs100.23 crore to International Finance Corporation (IFC), on a preferential basis, in accordance with the SEBI Regulations, the company said in its release.
The company will seek approval of the shareholders for the above through a postal ballot. The date of declaration of the postal ballot results is scheduled for 4 May 2010, which will be deemed to be the date of approval of the shareholders, the release said.
Chola DBS is expected to convert Rs300 crore preferential shares by September 2010. With the conversion of preferential shares, the promoter's stake in Chola DBS will go up to 85 per cent.