Liabilities of HDFC Ltd might be transferred to HDFC Financial institution upon their merger and there’s no have to repay such dues on the very first day of the merger, the lender stated on Thursday.
The nation’s largest personal sector financial institution by stability sheet measurement is about to merge its father or mother mortgage lender Housing Growth Finance Company Ltd (HDFC Ltd) with itself.
HDFC Financial institution stated it has not accredited any plans to boost funds to pay in direction of such liabilities of HDFC Ltd.
“As per the proposed composite scheme of amalgamation, the liabilities of HDFC Restricted might be transferred to the financial institution and might be serviced and repaid by the financial institution as per the contracted maturity,” HDFC Financial institution stated in a regulatory submitting.
The financial institution just isn’t required to repay any quantity of legal responsibility of HDFC Ltd on day one of many merger until coincidentally any explicit legal responsibility occurs to mature on the identical date.
HDFC Financial institution has already obtained in-principle approval from the Reserve Financial institution (RBI) for the merger with HDFC Ltd, amongst different approvals.
The parent-subsidiary merger is seen as the most important transaction in India’s company historical past.
In April this 12 months, HDFC Financial institution and HDFC Ltd introduced the merger proposal through which the lender will take over the mortgage lender for about USD 40 billion in about 18 months.
The knowledge offered by the lender comes as a clarification in response to a information report, which acknowledged that HDFC Financial institution is required to boost over ₹2.2 trillion as a way to repay HDFC Ltd’s legal responsibility when the merger between them involves impact.
HDFC Financial institution stated the information report is factually incorrect and speculative.
The inventory of HDFC Financial institution traded at ₹1,427.65 apiece on BSE, down 0.38 per cent.
This story has been revealed from a wire company feed with out modifications to the textual content. Solely the headline has been modified.
Obtain The Mint Information App to get Every day Market Updates & Reside Enterprise Information.
Extra
Much less
Supply: Live Mint