Punjab National Bank, on Thursday, informed stock exchanges that it is calling off a deal to sell equity stake in its housing finance arm to Varde Holdings Pvt Ltd and General Atlantic. The deal has been called off after the two sides failed to get Reserve Bank of India approval for certain condition linked to the transaction.
Each of the private equity investors was due to buy 1.08 crore shares at rupees 850 per share, aggregating Rs 925.80 crore.
Post deal, PNB would have held strategic stake of 19.78 per cent of the paid up capital of the company.
The PNB informed that post termination of the share purchase agreement (SPA), it will continue to be the sole promoter of the company and stay strategically invested in the company.
“PNB and Varde have mutually agreed to terminate the SPA, and all rights and obligation of the parties there under with immediate effect,” PNB Housing Finance said in a filing to the Bombay Stock Exchange.
The competition commission of India and the National Housing Board had cleared the deal earlier this month. However, the transacting parties could not get the RBI’s approval to be exempted from applying for pricing guidelines under the Foreign Exchange Management (Transfer of Issue of Security to a Person Resident Outside India), Regulation , 2017.
The stake sale had an operating deadline of May 15, 2019.
Since all conditions precedent to completion of the transaction are yet to be fulfilled and completion has not occurred as on May 15, 2019 the SPA with General Atlantic Group stands terminated with immediate effect, the lender said.