SEBI halts PNB Housing Finance- Carlyle deal, what is the holdup?

SEBI has ordered the PNB Housing Carlyle deal to be put on hold as the market regulator SEBI wants an independent valuation of shares to be conducted.

The Rs 4000 cr deal with Carlyle for the PNB backed mortgage lender involves issuing shares and warrants on a preferential basis to private equity firm Carlyle Group and associates to acquire 50% stake in the company. The price of each share and convertible warrant was set at Rs 390/share

The stock of PNB Housing is up over 70% just tin the month of June, trading above the Rs 700/share mark at the time this report was written.

SEBI has stated the resolution about the issue of securities was “ultra-vires” of the Articles of Association (AoA). The resolution will not be acted upon until the company does the valuation of shares (for preferential allotment) by an independent, registered valuer.PNB HFC in a late night filing with the BSE said the company had acted in compliance with the laws, including pricing regulations prescribed by Sebi and the AoA.

PNB Housing was supposed to hold an extraordinary general meeting of shareholders on June 22 to consider the preferential allotment (shares and warrants).