Fairfax India offers Rs1,200 cr for 51% stake in Catholic Syrian Bank

Canda-based Prem Watsa's Fairfax group has offered to acquire a majority stake in Kerala-based Catholic Syrian Bank (CSB), one of the oldest private sector banks in the state, for around Rs1,200 crore.

Canada-based Fairfax India Holdings Corporation, which had earlier expressed interest in investing in CSB, has now formally indicated interest in investing 51 per cent in the share capital at a mutually agreed price of Rs140 per share, reports quoting official sources at the bank as saying.

The investment is subject to customary closing conditions, including legal documentation and receipt of all applicable approvals from the boards of both companies and shareholders as also regulatory approvals, including the approval of the Reserve Bank of India and the Competition Commission of India.

Fairfax India is an investment company that invests in public and private equity securities and debt instruments in India and Indian businesses or other businesses with customers, suppliers or business primarily conducted in, or dependent on, India.

At Rs1,200-crore for a 51-per cent share capital, the present valuation of CSB is 25-per cent lower than the rates the bank was earlier demanding.

In fact, Fairfax's earlier offer for CSB was much higher but the sale could not materialise as CSB demanded a higher valuation. The Canadian firm has come back with an offer of Rs140-a-share offer a year later.

Meanwhile, CSB is reported to have taken various initiatives in the past few years to reinvent itself in the highly competitive banking space and it expects the Fairfax India investment to give a substantial boost to these efforts.

The fresh capital infusion will herald the next stage of development, TS Anantharaman, chairman of Catholic Syrian Bank, was quoted as saying.