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No PNB shares for Nedungadi shareholders

MUMBAI NOV. 16. The Reserve Bank of India and the Securities Exchange Board of India today said the draft scheme of amalgamation of Nedungadi Bank with Punjab National Bank does not envisage allotment of shares of PNB to shareholders of the Kerala-based entity.

As per the draft scheme, the RBI clarified that PNB would first evaluate the assets and determine the liabilities of Nedungadi Bank and on completion of this exercise, PNB would pay the depositors and creditors to the extent of their balances.

The shareholders of Nedungadi Bank would be entitled for payment of pro-rata value of shares only if any surplus remained after paying off the depositors and creditors, the RBI said here in a statement.

The SEBI also said in a statement that the proposed merger of Nedungadi Bank with PNB was exempted from the applicability of regulations 10, 11 and 12 of its takeover code and consequently, there would not be any public announcement or open offer for acquisition of shares.

The statement from both regulators comes in the wake of media reports regarding price movement of shares of Nedungadi Bank ever since the scheme was notified on November 13. Nedungadi scrip then rose by 4.45 per cent to Rs. 15.25 and PNB was up by 1.21 per cent to Rs. 41.85 a day later.

Merger likely by January

KOZHIKODE NOV. 16. The merger of the private sector Nedungadi Bank with Punjab National Bank is likely to be completed by January, NBL Chairman, J R Prabhu, said today. ``With the RBI seeking suggestions on its draft scheme for the proposed amalgamation from the NBL, PNB and depositors by November 30, the entire process of merger is likely by January next'', Prabhu told PTI here.

PTI

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