Central Bank of India to exit housing finance business; to sell JV stake for Rs 160 crore

NEW DELHI: State-owned Central Bank of India will exit housing finance joint venture by selling its entire stake of over 64 per cent to Centrum Housing Finance for Rs 160 crore.”This is to inform that the bank has entered into a binding agreement to divest its entire equity stake of 64.40 per cent i.e. 1,61,00,000 shares of face value of Rs 10 each in Cent Bank Home Finance Ltd (CBHFL), to Centrum Housing Finance, subject to approvals from regulatory authorities,” Central Bank of India said in a BSE filing.According to a separate filing by Centrum Capital, the parent of Centrum Housing, the cost of acquisition is about Rs 160 crore on cash basis.”The company’s subsidiary, Centrum Housing Finance has entered into a share purchase agreement with Central Bank of India for acquisition of bank’s entire equity stake in CBHFL constituting 64.40 per cent of the share capital of CBHFL on a fully diluted basis, ” Centrum Capital said in the filing.The target entity is in the same line of business as the subsidiary, hence this is a strategic acquisition, it added.Centrum Capital said the deal is expected to be closed in about two to three months.CBHFL is a financing and mortgage company jointly promoted by four public sector institutions — Central Bank of India, National Housing Bank, Specified Undertaking of Unit Trust of India (SUTTI) and Housing and Urban Development Corporation (HUDCO).The company’s asset under management stood at Rs 1,211.70 crore as of September 30, 2020. Total income was Rs 65.81 crore.Present in nine states, the company’s customers include individuals, associations of persons, companies, corporations and societies.
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