Financial Daily from THE HINDU group of publications
Sunday, Nov 24, 2002
Financial Daily from THE HINDU group of publications Sunday, Nov 24, 2002 |
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Markets
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Mutual Funds UTI's stake in banking arm to go to UTI-I Poornima Mohandas
MUMBAI, Nov. 23 UNIT Trust of India's 42 per cent shareholding in UTI Bank will be transferred to UTI-I after the public sector mutual fund is split into two under a Government-sponsored rehab package. A senior official of the bank said the promoters' holding would be transferred after Parliament passes the amendments to the UTI Act. A Bill to amend the Act is scheduled to in the winter session of Parliament. The Act will formally split the country's largest mutual fund into UTI-I and UTI-II. While UTI-I will comprise the assured-return schemes, UTI-II will consist of all the NAV-based plans. UTI-II will be owned and managed by Life Insurance Corporation of India, State Bank of India, Bank of Baroda and Punjab National Bank. Several foreign investors are currently conducting a due diligence of the bank. Salomon Smith Barney, a subsidiary of Citibank, is the merchant banker. "The due diligence by the various investors are at different stages," the official told Business Line. "The bank expects to announce the new foreign investor by December-end," he said. UTI Bank officials had told Business Line in July that it is planning to dilute 12-15 per cent equity by privately placing close to Rs 200 crore to foreign investors. As per the current shareholding pattern of the bank, UTI holds 42 per cent, the Mauritius-based private equity fund, CDC Capital Partners, holds 24 per cent and the rest is free float. In September 2001, UTI Bank had sold 26 per cent stake to CDC Capital Partners at Rs 34 per share aggregating Rs 158 crore which diluted UTI's holding to 44.88 per cent. UTI Bank made a preferential allotment of equity shares to LIC, GIC and its subsidiaries in March 2002 to bring down the promoter's stake. UTI Bank had proposed a preferential allotment of fully convertible zero-coupon debentures worth Rs 60 crore to AIG Indian Sectoral Fund, which failed to materialise. The debentures of which were supposed to be converted into equity on June 30, 2002.
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