Will work through it: IDFC First Bank responds to Warburg board seat denial

Shareholders approve fund infusion by Warburg and ADIA but reject proposal allowing Currant Sea Investments to nominate a non-executive director to the bank's board

A day after IDFC First Bank’s shareholders rejected a board seat to Warburg Pincus arm, Currant Sea Investments B V, the bank on Tuesday said that it will continue to work through the matter and pursue the remaining regulatory approvals alongside.

 

“Regarding the right to nominate a director in articles of association not receiving requisite majority, we are confident of working through this matter, and we are also proceeding with seeking other remaining regulatory approvals in parallel,” the bank said in an exchange notification.

 

Meanwhile, shares of the lender tumbled over 2 per cent on the BSE to close at ₹67.16. 

 

The bank's shareholders on Monday rejected a proposal to allow Currant Sea Investments BV to nominate a non-retiring, non-executive director to the bank’s board. The special resolution secured only 64.1 per cent votes, falling short of the 75 per cent required for it to pass. 

 

The bank had sought shareholders’ approval through postal ballot to reclassify authorised share capital of the bank, and amend the capital clause of the memorandum of association of the bank. Additionally, they sought shareholders’ approval to issue and allot CCPS of ₹7,500 crore on preferential basis, and amendment to the articles of association of the bank and approval to provide a right to “Currant Sea Investments B V” to nominate one non-retiring non-executive director.

 

While the first two resolutions were passed by the shareholders, the third was rejected.

 

“The shareholders of the bank have approved the resolution for fund raise of ₹7,500 crores with an overwhelming majority of 99.18 per cent in favour,” the bank said on Tuesday, adding that the shareholders of the bank have also gave their nod to the resolution for corresponding reclassification of authorised share capital, with 99.38 per cent of votes in favour.

 

US-based private equity firm Warburg Pincus LLC and the Abu Dhabi Investment Authority (ADIA) have agreed to collectively invest ₹7,500 crore in the bank through a preferential equity issue, aimed at supporting the lender’s next phase of growth.

 

Warburg Pincus, through its affiliate company Currant Sea Investments B V, is planning to invest ₹4,876 crore, while ADIA will be investing ₹2,624 crore through its wholly-owned subsidiary Platinum Invictus B 2025 RSC.

 

Following the fund raise, Currant Sea Investments B V will hold 9.48 per cent and Platinum Invictus B 2025 RSC will hold 5.1 per cent in the bank on a post-money basis on conversion of Compulsorily Convertible Preference Shares (CCPS).