Markets regulator Sebi today exempted the government from making an open offer pursuant to to its acquisition of additional 7.75 per cent stake in Syndicate Bank under a capital infusion plan.
Among others, the exemption granted is subject to few conditions such as the acquisition should be in compliance with the Companies Act and any other applicable law.
The Government of India already holds 65.17 per cent shares in Syndicate Bank. Post acquisition, government’s stake will go up to 72.92 per cent.
“The proposed acquisition is necessitated on account of the GOI’s objective that all public sector banks are adequately capitalised for ensuring compliance with BASEL III norms,” the Securities and Exchange Board of India said.
As per Sebi’s Takeover regulations, no entity can acquire more than five per cent of the additional shares or voting rights within any financial year unless the acquirer makes a public announcement of an open offer for acquiring shares of the target company.
Granting exemption, Sebi said there will be no change in control of Syndicate Bank pursuant to the acquisition as the change will only be in the manner of holding the shares by the Government.
Further, there will be no change in the number of equity shares held in the bank, by the public shareholders, pursuant to the proposed transactions, it added.
The government in July had proposed capital infusion of Rs 1,034 crore in Syndicate Bank, out of which Rs 776 crore was to be infused immediately, in lieu of a proposed preferential allotment of approximately 10.60 crore equity shares. This was subsequently approved by the Board of Directors of the bank in August.
The infusion of additional capital by the government will enable the bank to maintain a capital over and above the minimum requirement mandated under Basel III norms and will also provide the bank with additional leverage for raising further equity capital at a later date, as and when the need arises, Sebi said.