Financial Daily from THE HINDU group of publications
Thursday, Mar 28, 2002
Money & Banking - Private Banks
Move to trim promoters' stake -- UTI Bank to make pref allotment
MUMBAI, March 27
UTI Bank is to make a preferential allotment of about 1.35-crore equity shares of face value Rs 10 each at a premium of Rs 29.04 per share to LIC, GIC, National Insurance Company and New India Assurance Company.
The issue is aimed at bringing down the promoters' stake to below the regulatory cap of 40 per cent, a senior UTI Bank official said.
According to the senior official, the preferential issue would bring down Unit Trust of India's stake in the new generation private sector bank to 39.64 per cent from the current 44.88 per cent. The total capital of the bank would go up to Rs 201.81 crore from the current Rs 178.25 crore.
The preferential issue would not, however, alter the capital adequacy ratio because of an expansion in asset base, the official said. It is in the region of 10-10.5 per cent currently.
The proposal, cleared by the board of directors of UTI Bank today, envisages allotment of up to 36,55,000 fully paid-up equity shares of face value of Rs 10 each to LIC at a price of Rs 39.04 per share (inclusive of a premium of Rs 29.04 per share), a bank release said.
Up to 59,42,820 shares would be placed with GIC, up to 19,80,940 equity shares with New India Assurance Company Ltd and up to 19,80,940 shares with National Insurance Company Ltd.
After the allotment, the holding of LIC would go up to 6.32 per cent from 5.11 per cent and that of GIC and subsidiaries would increase to 8.82 per cent from 4.43 per cent.
At the, the board of directors also appointed Mr J.M. Trivedi, Director, CDC Capital Partners, as an alternate director to Mr Paul Fletcher.
UTI Bank had, some time ago, diluted promoters' stake through a private placement of 26 per cent equity with Mauritius-based CDC Capital Partners.
The board also decided to raise Tier II capital through a subordinated bond issue aggregating Rs 33.50 crore, including a greenshoe option of Rs 20 crore.
The unsecured redeemable non-convertible debentures, to be placed privately, carry a coupon of 9.3 per cent per annum.
The bank currently has a deposit base in excess of Rs 10,000 crore and advances exceeding Rs 5,000 crore. It has 100 branches and an ATM network of about 440 machines.
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