Dhanlaxmi Bank Ltd's plans to raise about Rs 290 crore through a preferential issue appears to have come unstuck at least for the present as one of the investors said it could not participate in the issue.. As the shareholders' nod for the preferential allotment lapses today, the bank will have to seek fresh approval in case it wants to come out with a fresh allotment.

Though the counter witnessed a huge volume of trading of nearly a million shares in the NSE, the share price closed weaker at Rs 113.90.

Regulatory reasons

In a communication to the stock exchanges on Friday, Dhanlaxmi Bank Ltd said that it has been informed by Customers Bancorp Inc that it will not be able to participate in this preferential allotment and subscribe to the equity shares due to certain regulatory reasons applicable in the jurisdiction of its incorporation.

Pursuant to the above, the other proposed investors have also expressed their reservations in subscribing to the preferential issue, the bank said.

According to SEBI regulations, the allotment has to be completed within a period of 15 days from the date of the shareholders' approval and the shareholders' approval shall cease to be valid on July 8 (today) since it was given on June 22.

To seek fresh approval

In the event that the Bank wishes to undertake a further issue of equity shares by way of preferential allotment, the Bank shall obtain a fresh shareholders' approval under the provisions of the Companies Act, 1956, as amended, the Bank said in its notification to the NSE. (The Issue Committee of the board of directors had approved on May 19, the issue and allotment of up to 2,07,52,000 equity shares of Rs 10 each at a premium of Rs 130 per equity share aggregating an issue price of up to Rs 290.52 crore to the investors on preferential allotment basis.)

The bank had proposed to issue to Customers Bancorp Inc equity shares not exceeding 51.88 lakh shares for value not exceeding Rs 72.63 crore, giving it a 4.90 per cent stake in the post issue shareholding on a fully diluted basis.

A similar number of shares were proposed to be allotted to MKCP Mauritius Master Holdings II Ltd or any subsidiaries or affiliates and WCP Mauritius Holdings for identical value and stake.

The other two preferential allottees were Multiples Private Equity FII I of 36.31 lakh shares valued at Rs 50.84 crore (3.43 per cent stake) and Multiples Private Equity Fund of 15.56 lakh shares worth Rs 21.78 crore.

At the BSE, the shares of the bank closed at Rs 113.75, down 5.01 per cent.

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