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BSE to complete USE acquisition within nine months

LiveMint logoLiveMint 15-06-2014 PTI

New Delhi: Leading bourse BSE Ltd expects to complete the acquisition of United Stock Exchange India Ltd (USE) in the next eight to nine months, a time period during which regulatory as well as shareholder approvals are likely to be in place.

The share-swap deal has already been approved by boards of both exchanges.

“We are in the process of getting approvals from the regulators and the High Court (for the deal)... It takes around 8 to 9 months for all this process to get over,” BSE chairman and managing director Ashishkumar Chauhan told PTI. The deal also has to be approved by the shareholders of the two bourses.

As per the agreed deal, for every 385 shares held in USE a shareholder would get one share of BSE. The loss-making USE is trading only in currency futures.

BSE is already a strategic partner in the exchange and was the single largest shareholder with nearly 15% at the end of December 2013.

For the year-ended March 2014, USE posted a net loss of `3.93 crore compared to a net profit of `46.36 lakh in the year-ago period.

The exchange’s net loss stood at `2.47 crore in the quarter ended March. In the same period a year ago, it had a net profit of `56.41 lakh.

Going by reports, USE’s net worth stood at around `118 crore at the end of December last. Under Securities and Exchange Board of India (Sebi) regulations, an exchange should have a minimum net worth of `100 crore.

BSE, Asia’s oldest bourse, late last year had launched trading in currency derivatives.

Apart from BSE, private sector lender Federal Bank Ltd is another major shareholder with about a 6% stake in USE at the end of December.

Other stakeholders, at that time, included Standard Chartered Bank (Mauritius) Ltd, HDFC Bank Ltd, State Bank of India, MMTC Ltd and Jaypee Capital Services Ltd.

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