New Delhi, Financial services group JM Financial on Saturday said it has decided to consolidate its stake in wholesale loan syndication and distressed loan businesses under a single platform.
The consolidation aims to leverage JM Financial Group's expertise to achieve higher risk-adjusted returns and shift towards a diversified syndication model.
"The Board of Directors, in its meeting held today, approved the acquisition of 42.99 per cent stake in JM Financial Credit Solutions Limited (JMFCSL) by JM Financial Limited (JMFCSL) for approximately Rs 1,282 crore," the company said in a statement. ,
Further, the Board has also given its approval for "Acquisition of 71.79 per cent stake in JM Financial Asset Reconstruction Company Limited (JMFARC) from JMFL by JMFCSL for Rs 856 crore".
After the transaction, JMFL's stake in JMFCSL will increase from 46.68 per cent to 89.67 per cent. Also, JMFCSL's stake in JMFARC will increase from 9.98 percent to 81.77 percent.
The proposed transaction will result in a net cash outflow of approximately Rs 426 crore from JMFL which will be funded from surplus cash. JM Financial said that subject to requisite regulatory, shareholder and other approvals, both transactions are expected to be completed in 3-6 months.
Vishal Kampani, non-executive vice-chairman, JM Financial Limited, said, "The proposed transaction will align our corporate and capital structure offering our shareholders greater flexibility to optimize capital allocation and distribution of profits."
“We see significant long-term growth opportunities emerging for our businesses and we are well-positioned to take advantage of them in the evolving market landscape,” said Kampani.
The consolidation aims to leverage JM Financial Group's expertise to achieve higher risk-adjusted returns and shift towards a diversified syndication model.
"The Board of Directors, in its meeting held today, approved the acquisition of 42.99 per cent stake in JM Financial Credit Solutions Limited (JMFCSL) by JM Financial Limited (JMFCSL) for approximately Rs 1,282 crore," the company said in a statement. ,
Further, the Board has also given its approval for "Acquisition of 71.79 per cent stake in JM Financial Asset Reconstruction Company Limited (JMFARC) from JMFL by JMFCSL for Rs 856 crore".
After the transaction, JMFL's stake in JMFCSL will increase from 46.68 per cent to 89.67 per cent. Also, JMFCSL's stake in JMFARC will increase from 9.98 percent to 81.77 percent.
The proposed transaction will result in a net cash outflow of approximately Rs 426 crore from JMFL which will be funded from surplus cash. JM Financial said that subject to requisite regulatory, shareholder and other approvals, both transactions are expected to be completed in 3-6 months.
Vishal Kampani, non-executive vice-chairman, JM Financial Limited, said, "The proposed transaction will align our corporate and capital structure offering our shareholders greater flexibility to optimize capital allocation and distribution of profits."
“We see significant long-term growth opportunities emerging for our businesses and we are well-positioned to take advantage of them in the evolving market landscape,” said Kampani.
