Fairfax India Holdings, the Indian arm of Canadian investor Prem Watsa’s flagship firm, is picking up a 51 per cent stake in Kerala-based Catholic Syrian Bank (CSB) for about Rs 12 billion.
The bank’s board today approved Fairfax’s proposal and both parties are expected to sign an agreement next week.
The bank’s chairman, T S Anantharaman, has confirmed the development and said Fairfax India Holdings Corporation has formally indicated its continued interest in investing 51 per cent in the share capital of the bank at a mutually agreed price of Rs 140 per share.
“The investment is subject to customary closing conditions, such as completion of required legal documentation and receipt of all applicable board, shareholder and regulatory approvals, including the approval of the Reserve Bank of India and the Competition Commission of India,” Anantharaman said .
Fairfax had said last year that it was ready to invest up to Rs 10 billion in CSB for 51 per cent stake, but the deal did not take place due to valuation issues.
After the fall out, the bank started scouting for a new set of investors and met dozens of them as well.
Finally, Fairfax came back on Board.
The RBI had also approved Fairfax’s proposal last year. Both parties must now approach the banking regulator to renew the earlier approval, which should be easier than bringing in new investors and going to the regulator for a fresh approval.
The bank expects to close the deal by March, subject to regulatory clearances.
CSB’s MD & chief executive, C V R Rajendran said that the capital will help the bank to double its balance sheet size.
“CSB has taken various initiatives in the past few years to reinvent itself in the highly competitive banking space and the proposed Fairfax India investment will boost these efforts in a substantial manner,” he said.
“We will be a high quality SME bank and will focus on five to six states even after having a pan-India presence,” said Anantharaman earier.standard