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Shardul Amarchand Mangaldas & Co. Advises on IDFC Bank Demerger | ||
New Delhi, Delhi, India; Mumbai, Maharashtra, India Shardul Amarchand Mangaldas & Co. (SAM & Co.) advised IDFC on its demerger.
Net worth of IDFC Bank on the effective date (subsequent to vesting of financial undertaking and capitalisation) would be approximately Rs. 13,825 crores (approx. US$ 2.165 billion). Net worth of residual IDFC would be approximately Rs. 10,514 crores (approx. US$ 1.646 billion).
The SAM & Co. team was led by Executive Chairman Mr. Shardul Shroff. The key partners were Mr. Raghubir Menon and Mr. Anirudh Das. The supporting team included Mr. Manu Krishnan, Principal Associate, Ms. Natashaa Shroff, Principal Associate, Mr. Aashish Gupta, Principal Associate Designate, Ms. Neha Udeshi, Mr. Taranjeet Singh, Ms. Deepa Rekha and Mr. Arjun Pall, Associates.
IDFC had received an in principle approval from the Reserve Bank of India (“RBI”) to operate as a bank. Pursuant to the conditions set out under the RBI guidelines for licensing of new banks, IDFC had to revise its organisation structure for IDFC Bank and for its other businesses under a non-operating financial holding company. Accordingly, IDFC decided to demerge its financial undertaking to IDFC Bank through a scheme of arrangement and separately, transfer the shares of its subsidiaries which undertake other regulated financial services business to its non-operating financial holding company.
Upon effectiveness of the scheme of arrangement, IDFC Bank will commence operations as a RBI licensed bank after having received the financial undertaking from IDFC and shall be listed on the NSE and the BSE.
SAM & Co. advised IDFC in relation to: a) Reviewing the indebtedness of IDFC (which included domestic lenders, ECB lenders and bond holders) to identify lender approval requirements b) Structuring of the reorganisation of IDFC in compliance with the RBI guidelines for licensing of new banks and applicable SEBI and company law c) Competition law concerns, protection against hostile takeovers, intellectual property rights in IDFC marks, transfer of employees, transfer of fixed assets, transfer of loan portfolio and security interest, SEBI requirements for demergers of listed companies, process and timelines for demerger and other aspects of the demerger d) Preparation of scheme of arrangement between IDFC and IDFC Bank, preparation of all documents for filing of scheme of arrangement with SEBI, BSE (designated stock exchange) and the Madras High Court and preparation of presentations for board of directors and investors of IDFC e) Appearing in Madras High Court in relation to the scheme of arrangement between IDFC and IDFC Bank and briefing senior counsels
The demerger was sanctioned by the Madras High Court on 25 July 2015 and the scheme is expected to be Effective in October 2015.
Innovative Features of the deal:
Deloitte Haskins & Sells LLP acted as tax advisor. SSPA & Co acted as chartered accountants. JM Financial provided the fairness opinion on the share entitlement ratio adopted under the scheme.
About Shardul Amarchand Mangaldas & Co. (SAM & Co.): Shardul Amarchand Mangaldas & Co. (SAM & Co.) is one of India’s leading full service law firms. Founded on almost a century of legal achievement, SAM & Co. reconstituted in May 2015 and has started anew. The Firm is known for its exceptional Mergers & Acquisition, Competition Law, Dispute Resolution & Arbitration, Regulatory Litigation, Capital Markets and Private Equity practices globally.
Its mission is “enabling business by providing solutions as trusted advisors through excellence, responsiveness, innovation and collaboration”. The Firm has been at the helm of major headline transactions and litigations in all segments of industry and business besides representing major trans-national corporates on their India entry and business strategy.
Headed by eminent practitioners Shardul Shroff and Pallavi Shroff, the Firm has more than 350 lawyers, including 65 partners across its six offices in India, which include – New Delhi, Mumbai, Gurgaon, Ahmedabad, Bengaluru and Kolkata. |
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Media Contact Details
Mr. Rahul Gossain
Shardul Amarchand Mangaldas & Co. +91 9717498891 |
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