Does PNB Housing Finance provide PE Major Carlyle with control of its home finance business at a low price without extracting Control Premium? SEBI, a marker regulator, is considering a funding plan announced by PNB Housing Finance as corporate governance experts have signaled a danger.
SES, a Mumbai-based shareholder deputy adviser, said PNB Housing Finance has relinquished control of PNB housing and the transaction is an abuse of minority shareholder rights.
Stock exchange to investigate
SEBI also asked the stock exchange to investigate the transaction and see if there were any other warning signs, sources said. There is an internal feeling that SEBI needs to be considered by an expert as a serious issue has been raised.
The PNB housing said it did not control Carlyle. But on Thursday, SES released an explanation and abandoned PNB’s allegations. The SES states that the fact that the PNB has not assigned control is technically and legally incorrect.
According to SES, Carlisle and those who act at concerts own more than 50% of the company and give them control in terms of voting rights under the SEBI acquisition code.
“PNB holds a 20% stake and will be reduced to smaller partners. Both Carlisle and PNB have the authority to appoint two directors on the board, but the chairman’s post is Carlisle. In the case of a tie, Carlisle also effectively manages the board of directors, as the chairman has a decision vote (PNBHFL Article 109 (b)), “SES said on Friday. It was.
The SES further states that the PNB will lose at least Rs 200 billion by not claiming a rights issue. The PNB Housing Commission has approved a preferred allotment of shares worth 4000 chlores to Carlyle.
BV and intrinsic value
“We show investors that even if the book value per share is around £ 530, the book value is significantly higher than the issue price, but the proposed issue price is fair. We want you to believe that this is easy to find by observing the price-earnings ratio or net asset ratio of a private housing finance company (“HFC”), ”says SES.
PNB Housing states that capital injection is important, and various rating agencies and research firms have raised the need for this capital in their reports. Over the last two years, rating agencies have downgraded a company’s rating from AA + (stable) to AA (negative). This is one of the key funding concerns.
The main purpose of raising equity capital is to increase equity capital, reduce leverage and accelerate growth. In addition, the capital increase will provide sufficient capital buffer to strengthen the company’s balance sheet in the face of the potential stress of the second and subsequent Covid waves.
PNB Housing Finance-Carlyle Trading Under SEBI Supervision
https://www.thehindubusinessline.com/markets/stock-markets/pnb-housing-finance-carlyle-deal-under-sebi-scrutiny/article34791274.ece PNB Housing Finance-Carlyle Trading Under SEBI Supervision