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Ujjivan Financial Services Board approves merger with Ujjivan Sfb

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Ujjivan Financial Services Board approves merger with Ujjivan Sfb

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Ujjivan Financial Services Ltd (Ujjivan) said on Saturday that its board approved the merger of the company with its subsidiary Ujjivan Small Finance Bank (UFB) to meet the minimum public participation standards of the Securities and Exchange Board of India (SEBI). ).

The decision was made based on the recommendation of the audit committee and the independent directors committee at a meeting on Saturday, Ujjivan said in a regulatory document.

Under the merger scheme, Ujjivan Financial Services (transferring company) will be merged with Ujjivan Small Finance Bank (transferring company), and the dissolution will take place without dissolution of the transferring company. The merger is subject to approval by the Reserve Bank of India (RBI), the capital markets regulator SEBI, the public shareholders of the companies involved, as well as the National Company Law Court (NCLT).

Ujjivan is the holding company and promoter of Ujjivan Small Finance Bank (SFB).

Ujjivan currently owns 83.32 percent of the shares and 100 percent of the preferred shares of Ujjivan SFB.

According to the minimum standards of equity participation, the minimum initial contribution of the promoter in the SFB branch must be at least 40 percent. If the promoter’s initial stake in SFB exceeds 40%, it will be reduced to 40% within five years from the date of commencement of SFB’s operations.

“The aforementioned five-year period expires on January 31, 2022 for the transferee company (SFB), and the proposed merger among other business objectives and benefits would allow the transferee company to ensure the aforementioned compliance,” said Ujjivan.

Once the plan comes into effect, Ujjivan SFB would issue and allocate to Ujjivan Financial Services shareholders 115 shares of the bank’s capital for every 10 shares of Ujjivan’s capital.

Ujjivan said the merger would result in the formation of a larger and stronger entity with greater capacity to run its operations more efficiently and competitively. It will also lead to better management and cost reduction, he added.

(Edited by : Thomas Abraham)

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Ujjivan Financial Services Board approves merger with Ujjivan Sfb

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