Dena Bank capital infusion: Govt gets open offer exemption

Markets regulator Sebi today
exempted the government from making an open offer pursuant to
to its acquisition of an additional 5.66 per cent stake in
Dena Bank under its capital infusion plan.
The exemption has been granted subject to the condition
that the government or the bank would ensure compliance with
the statements, disclosures and undertakings made with regard
to the transactions, among others.
The central government, which is the promoter of the bank,
has proposed to acquire about 12.02 crore shares of Dena Bank
following a proposed preferential allotment by the lender.
The bank had filed its applications with the regulator to
seek exemption on behalf of its promoter, the Government of
India, on September 1.
The government holds 62.89 per cent stake in the bank and
the proposed allotment of shares would increase its
shareholding by 5 per cent in the financial year mandating
an open offer under the Takeover Regulation.
Post acquisition, the government's stake will go up to
68.55 per cent.
In an order, the Securities and Exchange Board of India
(Sebi) said, "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."
Granting exemption, Sebi said there will be no change in
control of Dena 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 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, the regulator said.
Under Sebi norms, entities holding 25 per cent or more
shares in a listed company need to make an open offer if they
acquire additional 5 per cent stake or more in that company.
However, exemptions can be granted by Sebi in certain
cases.