In a bad news for shareholders of Global Trust Bank, its acquirer Oriental Bank of Commerce on Monday said equity-holders will not get any value for their holdings now and can expect some relief only after 12 years if the troubled bank is left with any surplus value.
Amid trading in GTB counters, OBC sent a communique to the finance ministry and the Bombay Stock Exchange, announcing that all realisable assets of GTB will be set aside in a separate 'Asset Account,' which would be used to meet all the outstanding liabilities of the Secunderabad-based bank.
If there is any surplus in this Asset Account, it would be distributed on a pro rata basis to ordinary shareholders of GTB after 12 years or an earlier date as it is specified by government or RBI.
The record date for the GTB-OBC merger has been set at August 31, 2004.
When contacted, OBC chairman B D Narang told PTI: "We will set aside any surplus (assets minus the liabilities) into a separate escrow account (Asset Account). The shareholders will get the amount on a pro rata basis after 12 years."
OBC has ruled out any share-swap soon after it proposed to take over GTB a few weeks ago.
Narang said the GTB shares now amount to 'junk' paper and shareholders will not get any value out of it now.
The clarification comes in the wake of active trade at the GTB counters.
However, a section of investors were still active in buying GTB shares on the hope that they may get some relief once the merger takes place.