Union Bank gets Rs. 11.42 b capital infusion from TPG Group
Tuesday, 30 September 2014 01:52
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Union Bank confirmed yesterday that US-linked TPG Group has invested Rs. 11.42 billion in the company’s new stake amounting to 68%, formalising the mega deal and giving a major boost to the Lankan financial entity.
The investment was via Culture Financial Holdings Ltd., which is registered in Cayman Islands. It has invested Rs. 11.42 billion following the issuance of 742.156 million ordinary voting shares of Union Bank at Rs. 15.30 each by way of a private placement (Rs. 11.35 billion) and 218.28 million warrants for Rs. 0.30 per warrant (Rs. 65.5 million) to be exercised within six years at Rs. 16 per share.
The purchase was part of the original deal by which TPG/Culture Financial Holdings will increase its stake up to 70%.
Culture Financial Holdings is a wholly-owned subsidiary of TPG Asia VI SF Pte Ltd., a company registered in Singapore, which is owned by investment funds within TPG Group. TPG is one of the largest diversified alternative investment firms in the world with total assets under management of around $ 59 billion as at 3 December 2013. Since 1992, TPG has had lead responsibility for over 200 investments around the world.
Following the purchase, Culture Financial Holdings also announced that it was obliged to make a mandatory offer to rest of the Union Bank shareholders as per the SEC’s Takeovers and Mergers Code.
TPG Group has agreed to acquire up to 6.25% of the shares held by each shareholder excluding the offeror at Rs. 25 per share. Upon successful completion of the offer, the stake held by TPG/Culture Financial Holdings will increase from 68% to 70%.
Union Bank also announced the resignation of four Directors – Dr. Harsha Cabraal PC, Suren Madanayake, Sunil Karunanayake (all Independent Non Executive Directors) and Prince Faisal Al Abdullah Al Faisal Al Saud. The latter is the representative of Exsab International Holding Company for Trading Development, which holds 15 million shares.
As replacement two new Directors were appointed, Gaurav Trehan and Ranvir Dewan as nominees of Cultural Financial Holdings Ltd., as Non Independent Directors.
Trehan is a Principal of TPG and is based in Mumbai. Since joining TPG in 2004, he has spent time in TPG’s Hong Kong and Mumbai offices and has evaluated and executed private equity transactions in India and Southeast Asia. He serves on the Boards of Shriram Properties, Shriram Automall India, Shriram General Insurance and Shriram Life Insurance.
Prior to joining TPG he worked in the mergers, acquisitions and restructurings department of Morgan Stanley in Menlo Park with a focus on the technology sector. Trehan has a Bachelor of Science in Mathematics and Applied Science and Economics from the University of California, Los Angeles.
Dewan is Head of Financial Institutions Group of Operations at TPG. He joined TPG Capital in July 2006 and is based in Singapore. From April 2000 to July 2006 he was Executive Vice President and CFO of Standard Chartered First Bank (formerly Korea First Bank) in Seoul Korea.
Previously Dewan spent 13 years with Citibank Global Consumer Bank and held various senior positions in its international businesses. He was Regional Financial Controller of Citibank’s Global Consumer Bank with responsibilities covering 11 countries in the Asia Pacific region. Dewan has also held senior positions with KPMG in Canada and England, where he specialised in audits of financial institutions.
He is a Fellow of the Institute of Chartered Accountants in England and Wales (FCA) and a Member of the Canadian Institute of Chartered Accountants (CPA, CA). He holds a Bachelor of Commerce (Honours) degree from the Shriram College of Commerce, Delhi University, India.
He serves on the Boards of Shriram City Union Finance Ltd. and Bank BTPN in Jakarta, Indonesia. He is also a member of the Executive, Audit and Risk Committees of these institutions.
