US-based Customers Bancorp to invest Rs300 crore in Religare
27 Jun 2013
Noida-based financial services group Religare Enterprises Ltd yesterday said that US-based bank Customers Bancorp Inc (CUBI) will invest $51 million (Rs300 crore) through a combination of stake sale by founders and issue of share warrants and fresh shares.
Under the deal, CUBI, led by Jay Sidhu, a US-based banker of Indian origin, will acquire a 6.2-per cent stake in Religare for Rs310 crore.
Nasdaq-listed CUBI will buy shares worth $22 million from Religare promoters - billionaire brothers Malvinder and Shivinder Singh and invest $28 million in share warrants issued by Religare on a preferential allotment basis.
The warrants would be convertible into equity shares within 18 months. It will also subscribe to common equity shares of Religare equivalent to $1 million.
The Singh brothers are diluting their stake in the company as part of their plan to sell 22-per cent stake and bring down their shareholding to 49 per cent in order to allow Religare qualify to set up an NOFHC as per RBI guidelines to apply for a banking licence.
''CUBI management team's expertise in global banking will be extremely supportive in our banking foray. We are confident that the proposed association will further strengthen REL's endeavour to create a distinctive and diversified financial services conglomerate that believes in the Indian market's long-term growth potential,'' said Sunil Godhwani, chairman and managing director of Religare.
''We think there are mutually beneficial opportunities for both organisations to explore. Going forward, our management team's extensive banking experience will be available to Religare in its banking foray,'' said Jay Sidhu.
