PNB Housing Finance plans Rs 35,000 crore debt capital as Carlyle deal hangs fire

By: |
August 11, 2021 5:25 PM

The Carlyle-led deal was announced on May 31, in which a clutch of investors including former HDFC Bank MD&CEO Aditya Puri's family investment vehicle Salisbury Investments, were to infuse equity capital in PNB Housing. Puri is also a senior advisor for Carlyle in Asia.

However, the deal soon got into a controversy after a proxy advisory firm raised issues and said it would hurt the interest of the minority shareholders as well the promoter. It said the issue price of Rs 390 apiece was too low vis-a-vis the prevailing stock price.

PNB Housing Finance is now looking to raise Rs 35,000 crore debt, after facing legal hurdles in the Carlyle group deal, days after SAT gave a split verdict in the matter.

The company will seek shareholders’ nod in its annual general meeting (AGM) on September 3, 2021, PNB Housing Finance said in a regulatory filing on Wednesday.

The company said it will seek shareholders’ approval for further fund raising by way of debt issue.

“Shareholders’ approval is being sought in the 33rd AGM for further fund raising by way of debt issue and the shareholders are being requested to authorise the board of directors to offer, from time to time, the subscription of redeemable, secured/unsecured non-convertible debentures aggregating to Rs 35,000 crore in one or more tranches,” it said in the filing.

On Monday, Securities Appellate Tribunal (SAT) gave a split verdict in the company’s appeal to the court in the matter related to Rs 4,000 crore equity fund infusion led by its existing investor Carlyle group, and others through preferential allotment of shares and warrants.

Had the deal not stuck into regulatory and legal hurdles, the company would have been successful in raising the equity capital.

The Carlyle-led deal was announced on May 31, in which a clutch of investors including former HDFC Bank MD&CEO Aditya Puri’s family investment vehicle Salisbury Investments, were to infuse equity capital in PNB Housing. Puri is also a senior advisor for Carlyle in Asia.

However, the deal soon got into a controversy after a proxy advisory firm raised issues and said it would hurt the interest of the minority shareholders as well the promoter. It said the issue price of Rs 390 apiece was too low vis-a-vis the prevailing stock price.

Subsequently, Sebi asked the company to get the valuation of the issue price done from an independent registered valuer, while the company approached the SAT in June, citing it followed the Sebi guidelines on deciding on the price.

SAT in its order, by the two-member bench of Justice Tarun Agarwala and Justice M T Joshi said:”In view of the difference of opinion between the members of the bench “we direct the interim order dated 21st June, 2021 to continue till further order.”

Prevalence of interim order means the company can’t disclose the results of the shareholders’ voting that happened on June 22, to know if they cleared the proposal with requisite majority or not.

The company has been looking to raise funds for the past few years. Also, the Reserve Bank of India earlier this year had barred PNB from infusing capital into its subsidiary.

The Carlyle matter is likely to reach the Supreme Court since the tribunal did not provide a clear verdict on the way forward for the deal.

PNB Housing Finance stock closed flat at Rs 688 on BSE.

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