PNB terminates agreements to sell stake in housing finance arm

State-run Punjab National Bank Thursday said it has terminated the agreements with General Atlantic Group and Varde Partners to sell its stake in PNB Housing Finance (PNBHF). The bank, in a filing to the exchange, said it will continue to be the sole promoter of PNB Housing Finance post the termination of the pacts, and stay strategically invested in its housing finance arm.

Of the two agreements, the one with Varde Partners was terminated mutually, while the contract with General Atlantic Group was terminated in the absence of regulatory approvals.

In March this year, the bank had entered into two independent agreements for selling 1.08 crore of its equity shares held in PNBHF each to General Atlantic Group and Varde Partners at Rs 850 apiece.

The transaction with General Atlantic Group was required to be completed on or before May 15, 2019, the bank said.

The transactions needed approval from the Competition Commission of India (CCI), National Housing Bank (NHB) and the Reserve Bank of India.

The lender said communication from CCI approving the transaction has been received by General Atlantic Group on May 8, 2019, although the final order is yet to be received.
The NHB has also given its approval for the transaction on May 7, 2019.

"The transacting parties to the share purchase agreement (SPA) have not been accorded approval by the RBI for exemption from application of pricing guidelines under the foreign exchange management," the bank said.

Since all conditions precedent to completion of the transaction are yet to be fulfilled and completion has not occurred as on May 15, 2019, the SPA with General Atlantic Group stands terminated with immediate effect, the lender said.

The bank said it strongly believes in the growth story of housing finance and will continue to support the business and its management in pursuing their growth plans.