Public sector lender Bank of Baroda on Wednesday announced the swap ratio for the proposed merger of Vijaya Bank and Dena Bank.
"The board of directors of the bank at its meeting today approved fair equity share exchange ratio for amalgamation of Dena Bank and Vijaya Bank with itself," Bank of Baroda said in a filing to the Bombay Stock Exchange.
As per the scheme of amalgamation, shareholders of Vijaya Bank will get 402 equity shares of Rs 2 each of Bank of Baroda for every 1,000 shares held of Rs 10 each.
Similarly, Dena Bank's shareholders will get 110 shares of Rs 2 each Bank of Baroda for every 1,000 shares held of Rs 10 each.
In September last year, the government had announced the merger of Vijaya Bank and Dena Bank with Bank of Baroda to create the third-largest bank after State Bank of India and HDFC Bank. The government expects the new entity will be operational from the beginning of the next financial year.
Also Read: Govt wants to bring construction material under 5% GST slab, says PM Modi
The Board of Directors of Vijaya Bank and Dena Bank had already given its 'in-principle approval' to the merger of the bank with Bank of Baroda.
"A Grievance Redressal Committee headed by Shri Kode, retired judge of Mumbai High Court, has been set up to address the grievances of minority shareholders," Bank of Baroda informed the exchange.
Minority shareholders are those shareholders who either individually or collectively hold at least 1% of the total paid up equity capital of any of the bank.
Also Read: Infosys to announce third quarter results on January 11
In a separate development, the board of Bank of Baroda also approved issuance of Tier-II Capital Bonds compliant with Basel III Capital Regulations of Rs 285 crore, with a base issue size upto Rs 100 crore and a Green shoe option to retain oversubscription upto Rs 185 crore.
The board also approved issuance of Tier-II Capital Bonds compliant with Basel III Capital Regulations of Rs 1,000 crore, with a base issue size upto Rs 250 crore and a Green shoe option to retain oversubscription upto Rs 750 crore in single or multiple tranches.
Ahead of the announcement, shares of Bank of Baroda settled at Rs 119.40 apiece, down 3.16 per cent, as compared to the previous close of Rs 123.30. The stock hit an intraday high of Rs 124.60 and intraday low of Rs 118.30.
Meanwhile, Vijaya Bank shares ended flat at Rs 51.05 apiece, while that of Dena Bank settled at Rs 17.95.
Edited by Chitranjan Kumar