Date:24/02/2005 URL: http://www.thehindubusinessline.com/2005/02/24/stories/2005022402560600.htm

Back IDBI asked to extinguish 2.5 per cent Bank shares

Our Bureau

Mumbai , Feb. 23

THE Centre has asked IDBI to extinguish the 2.5 per cent stake the institution holds in IDBI Bank, which was proposed to be held in a separate trust following the merger between the two entities.

Earlier, the institution had decided to transfer 2.5 per cent of its shareholding in the bank to a trust in order to enhance shareholder value. As a result, the Government's stake in the merged entity would have come down to 51.4 per cent.

According to analysts, once these shares are extinguished, the Government holding in IDBI Bank would go up to 53 per cent.

Addressing an extraordinary general meeting of shareholders here today to pass the resolution for the scheme of amalgamation, Mr J.N. Godbole, Wholetime Director and acting Chairman, IDBI Ltd, said that IDBI Bank will convene a shareholders' meeting on Friday where existing shareholders of the bank who want to give up their holding will be given an exit option.

The amalgamation will be with retrospective effect from October 1, 2004, and the entire process of integration is expected to be completed in around three years.