Centurion Bank of Punjab and Lord Krishna Bank to merge

04 September 2006

Mumbai: The boards of directors of Centurion Bank of Punjab Limited and Lord Krishna Bank Limited today approved the merger of Lord Krishna Bank with Centurion Bank of Punjab.

The proposal is subject to all the requisite statutory, regulatory and shareholder approvals, including the approval of the Reserve Bank of India.

Rana Talwar will be the chairman and Shailendra Bhandari the managing director and CEO of the merged entity. It is proposed that Mohan Puri would join the board of Centurion Bank of Punjab, subject to regulatory approvals.

The independent valuers appointed jointly by both banks to determine the swap ratio for the merger, Deloitte Haskins & Sells and N M Raiji & Co have worked out the share swap ratio, which has been fixed at 5:7 ie. for every five shares of Lord Krishna Bank, its shareholders will receive seven shares of Centurion Bank of Punjab.

Centurion Bank of Punjab proposes to issue 75 million fully paid up equity shares at Rs24.54 per equity share for Rs184.05 crore to India Advantage Fund V and 95 million fully paid up equity shares at Rs25 per equity share for Rs 237 crore to Bank Muscat (S A O G).

The additional capital raised will enable the bank to maintain a strong capital position post merger and provide the support and drive that the bank requires to ensure accelerated growth over the following quarters.