Frustrated with the lengthy litigation and uncertainty over approvals, the board of PNB HFC decided to drop plans for a preferential issue of equity shares to raise Rs 4,000 crore from a group of investors led by private equity fund Carlyle.
The firm informed the stock exchanges on Thursday that PNB HF owners will also withdraw their open offer to carlyle investors who closed their own PNB stocks.
The fundraising plan, which including a of Rs. 3200 crore worth of shares and Rs. 800 crore worth of warrants, ran into controversy after a proxy advisory firm raised objections. The deal was subsequently halted by the Securities and Exchange Board of India Sebi The firm had challenged this order at the Securities Appellate Tribunal in the India which passed a split verdict. However, Sebi filed an appeal against the SAT order at the Supreme Court, which is still pending. In its exchange filing PNB HF said there continued to be no visibility or certainty over timeline for judicial determination of legal issues, as a third member of the Securities Appellate Tribunal SAT is yet to be appointed.
As a result of this uncertainty, there was no clarity on the shareholders' approval for the preferential issue.
The firm said that regulatory approvals required for the preferential issue were also pending and it was unclear whether such approvals would be forthcoming while the legal proceedings were ongoing. Therefore, the firm said it would delay its capital raising plans further.
the board believes that the current situation is not in the best interests of the company and its stakeholders, PNB HF said in the notice.
Carlyle PE entity Pluto Investments S.a.r.l together with people acting in concert will initiate the withdrawal of its open offer at Rs 403.22 per share As a result, the company said, it will look at other options to raise capital.
On June 30, PNB HF s AUM stood at Rs 71,828 crore. The company s capital adequacy ratio stood at 21.4 per cent with tier-I capital of 18.4 percent and tier-II capital at 3 per cent at the end of June.