Bank of Maharashtra to divest entire 4% stake in ISARC for nearly Rs 4 cr

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Public sector lender Bank of Maharashtra on Thursday said it will divest its entire stake of 4 per cent in India SME Asset Reconstruction Company for nearly Rs 4 crore.

Bank of Maharashtra (BoM) has executed a share purchase agreement dated April 6, 2022 for sale of entire equity stake of 4 per cent in India SME Asset Reconstruction Company Ltd (ISARC), the bank said in a regulatory filing.

The bank's 4 per cent stake, equivalent to 40,00,000 equity shares, will be sold at Rs 9.80 per share for a cash consideration for Rs 3.92 crore, it said.

The stake sale is subject to RBI approval for change in sponsor shareholder of ISARC. The transaction is expected to be completed by the end of December, 2022.

ISARC's total income stood at Rs 11.09 crore in the fiscal ended March 2021, and net profit was Rs 0.36 crore. It had reported losses of Rs 8.39 crore in FY20 and Rs 9.21 crore in FY19.

ISARC is the country's first Asset Reconstruction Company (ARC), supported by a large number of public sector banks and undertakings, focussed on NPA resolution of the MSME sector.

The ARC is sponsored by SIDBI, Bank of Baroda, Punjab National Bank, and SIDBI Venture Capital Ltd.

BoM stock closed at Rs 18.80 apiece on BSE, up 0.27 per cent from the previous close of Rs 18.75.