State-owned Central Bank of India will exit housing finance joint venture by selling its entire stake of over 64% to Centrum Housing Finance for ₹160 crore.
"This is to inform that the bank has entered into a binding agreement to divest its entire equity stake of 64.40% i.e. 1,61,00,000 shares of face value of ₹10 each in Cent Bank Home Finance Ltd (CBHFL), to Centrum Housing Finance, subject to approvals from regulatory authorities," Central Bank of India said in a BSE filing.
According to a separate filing by Centrum Capital, the parent of Centrum Housing, the cost of acquisition is about ₹160 crore on cash basis.
"The company's subsidiary, Centrum Housing Finance has entered into a share purchase agreement with Central Bank of India for acquisition of bank's entire equity stake in CBHFL constituting 64.40 per cent of the share capital of CBHFL on a fully diluted basis, " Centrum Capital said in the filing.
The target entity is in the same line of business as the subsidiary, hence this is a strategic acquisition, it added.
Centrum Capital said the deal is expected to be closed in about two to three months.
CBHFL is a financing and mortgage company jointly promoted by four public sector institutions -- Central Bank of India, National Housing Bank, Specified Undertaking of Unit Trust of India (SUTTI) and Housing and Urban Development Corporation (HUDCO).
The company's asset under management stood at ₹1,211.70 crore as of September 30, 2020. Total income was ₹65.81 crore.
Present in nine states, the company's customers include individuals, associations of persons, companies, corporations and societies.
