Monday, Jul 04, 2022

SAT Permits PNB Housing To Withdraw Appeal In Carlyle Deal

PNB Housing stated that its board has decided to terminate the stake sale to the investor consortium led by Carlyle Group owing to delays caused by legal proceedings.

PNB Housing on Wednesday informed that the Securities Appellate Tribunal (SAT) has permitted the company to withdraw its appeal in the matter pertaining to the Rs 4,000 crore Carlyle deal which was terminated in October. 

"...relating to the application filed by the Company before the Hon'ble Securities Appellate Tribunal (SAT) (Appeal No. 423 of 2021 ), seeking permission to withdraw the Appeal, SAT in its hearing on November 16, 2021, allowed the Company to withdraw its appeal," the company stated in a regulatory filing to the Bombay Stock Exchange. 

PNB Housing had stated that its board decided to terminate the stake sale to the investor consortium led by Carlyle Group owing to delays caused by legal proceedings. The investment was believed to be imperative for the state lender which was trying to accelerate lending after being in a serious liquidity crunch. This was on account of the collapse of Infrastructure Leasing & Financial Services Ltd (IL&FS) in 2018 and the COVID-19 pandemic.

Soon after the preference issue of shares was announced in May this year, controversy erupted with regard to the valuation of the shares to be offered to the investors and the capital markets regulator Sebi intervened and stalled the deal until there was a revaluation of the shares.

In turn, PNB Housing Finance approached the SAT which gave a split verdict in August. Sebi approached the Supreme Court, however, PNB Housing Finance decided to nix the deal rather than to get involved in a legal battle.

The board has decided not to proceed with the preferential issue and the share subscription agreements executed with the proposed allottees have been terminated in accordance with their respective terms, PNB Housing Finance said in October.

Earlier this month, the company's managing director and chief executive officer Hardayal Prasad had stated though the company has a solid capital adequacy ratio, it would need to raise the capital to potentially speed up its growth. 

The lender's profit after tax in the second quarter declined 25 per cent to Rs 235 crore compared. It had registered a PAT of Rs 313 crore in the comparable period last year. Net Interest Income fell 23 per cent to Rs 503 crore in Q2 against Rs 651 crore in the comparable period last year.

State-owned lender Punjab National Bank is the company's promoter. It holds a 32.6 per cent stake in the company. 

(With inputs from PTI)