L&T Finance Holdings Ltd (L&TFH) on Friday said it has decided to wind up its Dubai-based subsidiary L&T Capital Markets (Middle East) Ltd, after the proposed sale plan didn't materialise.
In early July, L&TFH informed that the share purchase agreement (SPA) with Proud Securities and Credits Pvt Ltd (an NBFC firm forming a part of InCred group) to sell 100 per cent of its shareholding in L&T Capital Markets (Middle East) was mutually terminated.
L&T Capital Markets (Middle East) LTCM (ME), a wholly owned subsidiary of the L&TFH, was into wealth management business based in Dubai, UAE.
"LTCM (ME) is not a material subsidiary of the company and only represents nearly about 0.1 per cent of the consolidated income and consolidated net worth of the company," L&TFH said in a regulatory filing.
The acquirer had applied to the RBI to seek permission to purchase shares of LTCM (ME) and RBI vide its email dated May 20, 2020 intimated that the application "could not be acceded to", it said.
After this, the buyer and seller were exploring various options to decide a way forward for consummation of the transaction in accordance with the terms of the SPA.
"Considering that an alternate structure and commercially mutual decision was not arrived at, the parties mutually terminated the SPA on July 2, 2020...Pursuant to this, the board of the company vide a resolution passed at its meeting held yesterday (July 16, 2020), approved the proposal to voluntarily wind up LTCM (ME) subject to applicable laws of UAE," it said.
The said proposal has also been approved by the board of LTCM (ME) at its meeting. The timelines for the winding up process will be as per the laws of UAE, it added.
The company also said that "it believes it has a clear 'Right to Win' and create value for all stakeholders, it should exit the offshore wealth management business at the earliest and focus on growing its core businesses to maximise return for its stakeholders".Also Read: Air India calls financial situation challenging, leave without pay 'win-win situation'