NCLT Chennai Approves Merger of Equitas Holding Ltd. & Equitas Small Finance Bank Ltd.
NCLT Chennai Approves Merger of Equitas Holding Ltd. & Equitas Small Finance Bank Ltd.
The National Company Law Tribunal, Chennai Bench approved the scheme of amalgamation of Equitas Holdings Limited (in short EHL) and Equitas Small Finance Bank Limited (in short ESFB), marking a major step forward for the Small Finance Bank (in short SFB) to apply for universal bank license with the Reserve Bank of India in short (RBI).
The primary objective of the proposed scheme of amalgamations bears reference to one of the conditions imposed by the RBI vide its license no. 119 dated 30th June, 2016 issued in favor of the Transferee Company and the RBI guidelines dated 27 November, 2014 for the Licensing of 'Small Finance Banks.'
The appointed date for the amalgamation shall be 1 January, 2023 which was as sought for by the Equitas Holding Ltd. After the merger, 231 shares of equitas small finance bank will be issued to the shareholders holding 100 shares in equitas holding limited. The Small Finance Bank's promoter equitas holdings limited, will cease to exist after the merger and there will be only one entity. The holding company's only business will be investment in the bank. Equity in the small finance bank will go up by 300 crore after the merger.
In a filing to the stock exchange, it was reported that Equitas Small Finance Bank stated that the NCLT order has sanctioned the merger scheme.
The Tribunal was of the considered view that the scheme as contemplated amongst the petitioner companies seem to be prima facie, not in any way detrimental to the interest of the shareholders of the Company.
"In view of the absence of any material objections from any statutory authorities and since all the requisite statutory compliances have been fulfilled, this Tribunal sanctions the Scheme of Arrangement," stated the Tribunal.
