Federal Bank announced that Blackstone, based in New York, will acquire a 9.99 percent stake by investing ₹6,196.51 crore through its affiliate Asia II Topco XIII, thereby concluding days of speculation and increasing the number of foreign investors acquiring shares in mid-sized Indian banks.
As part of this investment, which will be conducted through a preferential issue on a private placement basis, the Kochi-based private lender will issue up to 272.97 million warrants, each convertible into one fully paid-up equity share with a face value of ₹2, priced at ₹227 per share (including a premium of ₹225).
Upon the conversion of the warrants, the US private equity firm will hold a 9.99 percent stake in the bank, pending regulatory and shareholder approval. The warrants will have duration of 18 months from the date of allotment and may be exercised in one or more tranches.
Also Read: Maharashtra Govt Inks Rs 5,127 Cr Deal with Blackstone to Create 27,500 Jobs
The investor is required to pay 25 percent of the issue price at the time of subscription, with the remaining 75 percent due upon conversion into equity shares.
Any warrants that remain unexercised at the end of the tenure will expire, and the amount paid for them will be forfeited. Additionally, the bank’s board has granted Blackstone a special right to nominate one retiring non-executive director to the bank's board, contingent upon the exercise of all warrants and their retention of at least 5 percent of the paid-up share capital of the bank.
We use cookies to ensure you get the best experience on our website. Read more...
