NEW DELHI, December 9: For the first time in the domestic mutual fund industry a merger has taken place. HB Asset Management Company (HBAMC) has announced its merger with Credit Capital Asset Management Company (CAMCO). HBAMC will be merged with CAMCO effective April 1, 1997. The merger ratio has been fixed at 24:25, with 25 shares of HBAMC being swapped with 24 shares of Credit Capital Asset Management Company (CAMCO).

Driven by a SEBI requirement that AMCs should have at least Rs 10 crore net worth, the two AMCs see the merger as a marriage of convenience. CAMCO and HBAMC have net worth of Rs 5 crore and Rs 5.25 crore, respectively.

For HBAMC, a relatively small player in the MF industry with assets of Rs 24 crore under management, it makes economic sense to go in for the merger. The necessary statutory approvals from SEBI as well as the high courts are expected within three months. HBAMC will have to seek approval from the unitholders of its two schemes, HB Libra Leap and Taxshield. Under the merged entity, the five schemes of the two AMCs will continue as per the original terms of offer. Though the merger will give HB the majority stake, the AMC will be ``jointly controlled'', says Anil Goyal, director, HBAMC.

Currently, Credit Capital Finance Corporation has a 60 per cent stake in CAMCO while International Finance Corporation holds 20 per cent, UK based Edinburgh Fund Manager and Peerless Finance hold 10 per cent each. In turn, Lazard Capital and Udyan Bose and associates have 60:40 holding in Credit Capital Finance Corporation. Since Bhasin and associates control the entire networth of Rs 5.25 crore in HBAMC, they will now have the controlling stake of 52.5 per cent.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.