Fairfax receives preliminary regulatory approval to buy 51% in Catholic Syrian Bank
30 December 2016
Canada's Fairfax Financial Holdings Ltd, a property and casualty insurer run by billionaire Prem Watsa, today received preliminary regulatory approval to buy a 51-per cent stake in Catholic Syrian Bank.
"We got the permission (from RBI) yesterday and expect to close the deal over the next three to four months," said S Santhanakrishnan, chairman of Catholic Syrian Bank, said in a phone interview with Reuters.
"The next step for us is to appoint valuers to reach a proper valuation for the 51 per cent stake after which we will start negotiations," which would be followed by seeking final approval from India's banking regulator, he added.
Last month Watsa met Reserve Bank of India (RBI) governor along with Deepak Parekh, chairman HDFC who is also a board member of Fairfax India Holdings Corporation, to seek the regulator's nod for the deal. (See: Prem Watsa's Fairfax Financial close to buying controlling stake in Catholic Syrian Bank) The report said that Fairfax is likely to have 15 per cent voting rights in the Kerala-based lender.
In October, Catholic Syrian Bank said in a press release that it was in talks with various strategic investors like Asian Development Bank and Fairfax in order to raise further capital to expand its network of branches and ATMs across the country.
Founded in 1920 and based in Thrissur in Kerala, CSB is one of India's oldest private sector banks in India.
It is a full service bank offering neighborhood banking, NRI services, SME and wholesale banking services through its 430 branches and 240 ATMs.
Its newly appointed MD & CEO Anand Krishnamurty, plans to open more branches in a phased manner.
Fairfax is a financial services holding company with interests in property and casualty insurance and investment management, and employs over 8,200 globally.
Fairfax, led by Hyderabad-born chairman and CEO Prem Watsa, operates through 12 subsidiaries or joint ventures in Canada, the US, Singapore, Hong Kong and India.
Prem Watsa earned a chemical engineering degree from the Indian Institute of Technology Madras in 1971-1972 and later changed his field entirely after moving to Canada and got a masters degree in business administration from the University of Western Ontario.
Watsa, who controls nearly half of Fairfax, has often been called the Warren Buffet of Canada for his skill in value-oriented investing strategies.
Fairfax set up Fairfax India in late 2014 to boost the firm's investment in India. Fairfax India went public in January 2015 and raised more than $1 billion via its initial public offering.