Apollo, Everstone eyeing stake in Catholic Syrian Bank post Fairfax deal

Fairfax is slated to discuss its deal of buying 51% stake in the bank this week

PEs and various financial investors have shown interest to acquire stake in Catholic Syrian Bank (CSB), including Aion Capital, JM Financial and the Everstone-backed Indo Star Capital. Developments come at a time when Fairfax Financial holding Ltd has completed its valuation and sent its report to the Reserve Bank of India (RBI). 

Fairfax is looking to acquire 51 per cent stake, besides wanting to invest upto Rs 1,000 crore in the bank.

According  to bank's chairman T S Anantharaman, CSB is only conducting talks with Fairfax regarding the stake sell and is cuurently not engaging with other investors who have aprroached the banl informally.  

Aion Capital Partners is a PE firm backed by Apollo Global Management LLC. While Everstone Capital is looking to bag a deal wiht the bank by seeking a merger with IndoStar Capital Finance- finance company owned by Everstone.

Apart  from these major players, JM Financial has also shown interest in picking up stake in the Kerala-based Bank.

Both Everstone and JM Financial declined to comment on the issue.

However, several sources in the bank said that multiple investors have shown interest in the bank. Each investor was looking to buy 5-10 per cent stake, said the bank officials. Fairfax may, however, raise objections leading the bank to choose either Fairfax or others, added the bank officials.

Bank has submitted its valuation report ot the RBI and Fairfax. 

"Our next step is to start a discussion with Fairfax. We hope that we will be able to complete the deal before June," said  Anantharaman.

While he declined to share details of the valuation report, market sources pegged the bank's worth at about Rs 165-200 per share, beside a premium of at least 15 per cent.

Veteran investment banker and chairman of Enam group, Vallabh Bhanshali, has picked up an over 4 per cent stake in the bank from the Thailand-based Chansri Chawla family at an undisclosed price a month back.

Bloomberg further reported that Enam paid around Rs 160 per share- a premium to the lender's book value of about Rs 123 per share.

That purchase valued the bank at about 12.96 billion rupees ($200 million), data compiled by Bloomberg show.

Meanwhile, the bank has reported a profit of Rs 1.55 crore during 2016-17 as against loss of Rs 149.72 crore a year ago. Before the entry of new investors into the banks 'board, CSB cleaned up its books through write-offs, rationalising branches and other iniatives.

Anantharaman is confident that the bank will be able to sustain growth. The bank has created a road map for the next three years.

"We will be a high quality SME Bank and will foucs on five to six states even after having a pan-India presence," he added. The bank set a target to double its balance sheet from Rs 25,000 crore.

Commenting on the issue of non-performinf assets (NPAs), Anantharaman said that the bank was is in a much better place than other market players. Gross NPA of the bank stood at Rs 600.10 crore during the fourth quarter as compared to Rs 446.91 crore in the corresponding period last year. In terms percentage, it increased to 7.25 per cent from 5.62 per cent.