Fedfina board okays 17.40% divestment to True North Fund VI for Rs 168.60 cr

Private sector lender Federal Bank Thursday said the board of its NBFC arm Fedfina has approved divesting 17.40 per cent shares of the company to True North Fund VI LLP for a total consideration of Rs 168.60 crore.

"The board of Fedbank Financial Services (Fedfina), subsidiary company of the bank, had in its meeting dated November 13, 2018 approved allotment of 40,042,500 equity shares, with face value of Rs 10 each, corresponding to 17.40 per cent of the share capital of Fedfina, to True North Fund VI LLP on preferential basis for a total consideration of Rs 168.60 crore," Federal Bank said in a regulatory filing.

Last month, Federal Bank had received approval from the Reserve Bank to sell up to 45 per cent stake in non-banking financial company (NBFC) arm Fedfina to private equity firm True North.

Earlier in May, the board of the private sector bank had approved 26 per cent strategic investment by True North in Fedfina.

True North can further acquire additional equity shares of Fedbank Financial Services Ltd, constituting up to 45 per cent of the share capital in the company, Federal Bank said in a regulatory filing.

Fedfina is a fully-owned subsidiary of Federal Bank.

The arm is engaged in providing loans to individual and corporate borrowers, against the security of assets like gold and real estate property, for meeting personal and business expense and investment needs.

Shares of Federal Bank were trading 0.76 per cent lower at Rs 77.90 apiece on BSE.