PNB appoints i-bankers for stake sale in housing arm
PNB appoints i-bankers for stake sale in housing arm Mumbai, Jul 16 () Struggling to raise growth capital following a mountain of bad loan provisions, state- run Punjab National Bank (PNB) has appointed merchant bankers to sell a controlling stake in PNB Housing Finance, a top bank official has said.
The deal is expected to be finalised in the next few months, the official added.
Last week, the bank and Carlyle Group, which owns over 32 per cent in PNB Housing Finance, had announced their plans to sell at least 51 per cent stake in the company.
“We have just appointed the merchant bankers and are in the process of doing due diligence now,” managing director and chief executive Sunil Mehta told here today.
While PNB owns 32.79 per cent stake, Carlyle Group through its investment arm Quality Investment Holdings, owns 32.36 per cent in the Delhi-based PNB Housing Finance.
This May, Quality Investment Holdings had sold 4.8 per cent stake in the company for Rs 1,024 crore through an open market transaction.
When asked about the timing of the deal, Mehta said the bank will go to the market to offload the stake in the housing finance subsidiary at the right time.
Whether stake sale will happen in the second/third quarter, Mehta said, “yes, if the market condition is right and if we are able to get the right valuation, it may happen (in the second or third quarter)…It all depends on market conditions.”
The bank is also looking to list its life insurance arm, PNB MetLife Insurance.
PNB MetLife has as its shareholders MetLife International Holdings, PNB, Jammu & Kashmir Bank, M Pallonji & Company and other private investors. But Metlife and PNB own the majority.
Early this year, the bank had set a target of raising Rs 8,000-10,000 crore by selling non-core assets.
Mehta said the bank is revamping its internal processes to mitigate risks and to improve asset quality and profitability.