- Federal Bank approved preferential allotment of shares to Blackstone
- Blackstone's affiliate subscribed to 27 crore warrants at Rs 227 each
- Blackstone paid Rs 1,549 crore initially for 25% of the warrant issue size
Federal Bank Ltd. board on Monday approved preferential allotment of shares to Blackstone Inc., the world's largest alternative asset manager, as part of the Rs 6,200-crore investment deal secured in October last year.
The Kerala-based bank has issued over 27 crore warrants via a preferential allotment to Blackstone's Singapore-based affiliate Asia II Topco XIII Pte. Ltd. for Rs 227 apiece, according to an exchange filing on Friday.
The US firm has paid Rs 1,549 crore, or 25% of the warrant issue size, for the initial subscription, and the remaining 75% will be payable at the time of allotment of equity shares after exercise of warrants. The warrants have to be converted in 18 months.
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After the exercise of warrants into shares, Blackstone will own a 9.99% shareholding in Federal Bank and become the single largest shareholder of the private lender. The firm will be granted a special right to nominate one retiring non-executive director on the Federal Bank board upon exercise of all the warrants after it holds at least 5% of the paid-up share capital.
The Competition Commission of India approved the Federal Bank-Blackstone deal in December, followed by Reserve Bank of India's nod earlier this month.
Shares of Federal Bank traded 0.5% higher at Rs 289.60 on the NSE, as of 1:50 p.m., compared to 0.3% rise in the benchmark Nifty 50. The stock is up 60% in the last 12 months.
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