The Hindu : Business : Centurion, LKB approve merger

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Tuesday, Sep 05, 2006

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Business

Centurion, LKB approve merger

Special Correspondent

NEW DELHI: The boards of Centurion Bank of Punjab (CBP) and the Kochi-based Lord Krishna Bank (LKB) on Monday approved the proposed merger of the two private sector banks, subject to the approval of the Reserve Bank of India (RBI) and all other requisite statutory and regulatory clearances as also the nod of shareholders of the two entities. Announcing the decision, the CBP Chairman, Rana Talwar, said the share swap ratio had been fixed at 5:7. In effect, for every five shares of LKB, its shareholders would receive seven shares of CBP, he said.

According to a joint statement here, while Mr. Talwar will be the Chairman along with Shailendra Bhandari as the Managing Director and Chief Executive Officer (CEO) of the merged entity, LKB Director, Mohan Puri, will join the board of CBP, subject to regulatory approvals. Besides, as part of the integration process, there will be no retrenchment of staff of either of the two banks and there will be no closure of any of their rural branches.

To seek the approval of its shareholders for the proposed merger, CBP has decided to have an extraordinary general meeting (EGM) on September 30 while LKB will be having its annual general meeting on the same day.

Also, to shore up the capital base of the merged entity, the CBP board has given its nod to raise up to Rs. 400 crore through preferential allotment of shares to ICICI Ventures (7.5 crore shares) and the Bank of Muscat (9.5 crore shares) at a price of Rs. 24.54 per share.

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