The Bhate family of Sangli almost hold 30% of Sangli Bank.
Fresh issuance of 3.45 million shares will not impact our existing 892 million shares, said Kalpana Morparia, joint MD, ICICI.
ICICI Bank will seek to leverage Sangli Banks network of over 190 branches and existing one lakh customers and 1,850 employees in urban and rural centres for its rural and small enterprise banking operations, which are some of the key focus areas for the Bank.
ICICI Bank expects its rural banking business to constitute 15% of total assets in the next few years. The amalgamation will also supplement ICICI Banks urban distribution network.
Sources point out that a cash deal for the merger was avoided as the transaction at the recipient hands would have been taxed.
This is a good bank with low non-performing assets (NPA) but lacking capital. This is a voluntary merger between two banks and would be opened for rival bidding unlike United Western Bank, which was under Reserve Bank of India moratorium. We will retain all Sangli Bank employees, she said.
Chartered accountants Deloitte Haskins & Sells have been the independent valuers appointed jointly by the ICICI Bank and Sangli Bank, while KPMG is the adviser to the deal for ICICI Bank.The amalgamation is subject to the approval of shareholders of the ICICI Bank and Sangli Bank, Reserve Bank of India and such other approvals as may be required. The bank will help us strengthen our presence in Tamil Nadu, Karnataka and Maharastra, said Morparia.