PNB nets Rs216 crore through housing finance arm stake sale
10 December 2009
India's second largest public sector bank, Punjab National Bank (PNB) has agreed to sell 26 per cent stake in its wholly owned housing finance subsidiary, PNB Housing Finance (PNBHFL), to the US-based Destimoney Enterprises for Rs217 crore.
Although the stake sale was announced only yesterday, the decision on the same was taken by the bank's board long back in May (See: PNB to sell 26 per cent in housing finance arm to US firm).
The US company, formerly known as Dawnay Day, will acquire 78 lakh shares of PNBHFL at Rs101.5 each.
The total value of the deal was Rs217 crore. Out of this, Rs79.16 crore has been paid to the bank by the company, and the balance Rs137 crore would be converted to unsecured loan, a statement from PNB Housing Finance said.
This debt will get converted into equity at Rs101.50 per share as per the capital requirement of the housing finance company over a period of two years.
The definitive agreements in this regard have been executed by the bank, PNBHFL and Destimoney Enterprises.