Centrum Housing Finance Ltd (CHFL) is acquiring the 64.40 per cent stake held by Central Bank of India in Cent Bank Home Finance (CBHFL) for Rs 160 crore.

CBHFL is a financing and mortgage company jointly promoted by four public sector institutions — Central Bank of India, National Housing Bank, Specified Undertaking of Unit Trust of India and Housing and Urban Development Corporation (Hudco).

The company’s asset under management stood at Rs 1,211.70 crore as on September 30, 2020. Total income was Rs 65.81 crore. At present, it operates through 18 branches and two extension offices in nine states in the country.

“This is to inform that the bank has entered into a binding agreement to divest its entire equity stake of 64.40 per cent or 1,61,00,000 shares of face value of Rs 10 each in CBHFL, to Centrum Housing Finance, subject to approvals from regulatory authorities,” Central Bank of India told bourses.

RBSA acted as the exclusive transaction adviser to the PSU bank for this transaction.

Centrum Capital, the parent of Centrum Housing, said in a separate filing that the cost of acquisition is about Rs 160 crore on cash basis.

“The company’s subsidiary, Centrum Housing Finance, has entered into a share purchase agreement with Central Bank of India for acquisition of the bank’s entire equity stake in CBHFL constituting 64.40 per cent of the share capital of CBHFL on a fully diluted basis,’’ Centrum Capital said in the filing.

It added that the target entity is in the same line of business as the subsidiary, and therefore, this is a strategic acquisition.

``This transaction forms a key part of the bank’s divestment programme to facilitate unlocking the value of its non-core investments,’’ Ajay Malik, MD & head of investment banking at RBSA said while commenting on the development.

Centrum Capital further said that the deal is expected to be closed in about two to three months.