StanChart not to undertake rights issue of IDRs

British major Standard Chartered on Wednesday said it would not undertake the rights issue of Indian Depository Receipts (IDRs) due to procedural impediments and holders will be given a cash-out option.

"Due to certain procedural impediments, it (company) is not in a position to undertake the rights issue of IDRs in India, as there would be significant timing implications on the rights issue of shares in United Kingdom and Hong Kong," it said in a filing to the BSE.

Therefore, it is not practicable to extend the rights offering to the IDR holders, the company said.

"Accordingly, the company has decided to provide the cash-out option (sale of the entitlement of the IDR holders to the underlying shares and distribution of the net proceeds for sale of such rights) to the IDR holders, similar to the 2010 rights offering," it added.
 
The bank had issued IDRs in 2010. However, earlier this month, Standard Chartered had said it was examining the legal aspect whether IDR holders of the lender could participate in the planned $5.1-billion rights issue programme.

November 17 was fixed to determine the entitlement of holders of IDRs under the rights issue programme.