Mumbai, Maharashtra – Kotak Mahindra Bank Limited (KMBL) has officially announced the amalgamation of two of its wholly owned subsidiaries: Sonata Finance Private Limited (SFPL) and BSS Microfinance Limited (BML). This decision marks a significant development in the bank’s strategic consolidation efforts.
Details of the Amalgamation
Approval from Boards
- Board Decision: Both the Board of Directors (BoD) of Sonata Finance and BSS Microfinance have approved the Scheme of Amalgamation.
- Regulatory Framework: The amalgamation is proposed under Sections 230 to 232 of the Companies Act, 2013.
Regulatory Process
- Pending Approvals: The scheme requires approval from:
- Shareholders and creditors of Sonata Finance and BSS Microfinance
- National Company Law Tribunal (NCLT)
- Other relevant regulatory authorities
Share Exchange Ratio
- Share Issuance: As per the merger scheme, BSS Microfinance will issue and allot 1,931 shares of face value Rs 10 for every 10,000 shares of face value Rs 10 held by Sonata Finance.
Expected Benefits
Increased Operational Efficiency
- Operational Synergies: The merger aims to enhance operational efficiency through streamlined processes.
Administrative and Operational Rationalization
- Cost Reduction: The amalgamation is expected to reduce administrative overheads and operational expenses.
Financial Impact
- Expense Reduction: The merger will likely lead to lower overheads, positively impacting the financial health of the combined entity.
Background Information
- Previous Acquisition: In February 2023, Kotak Mahindra Bank Limited had announced the acquisition of Sonata Finance Private Limited. The recent amalgamation with BSS Microfinance continues KMBL’s strategy of optimizing its financial services portfolio.
