UCO Bank to come out with public offer of Rs 500-600 cr

New Delhi, Sept 2 (UNI) Kolkata-based public sector UCO Bank will be coming out with follow-on-issue of Rs 500-600 crore through the IPO route, which will hit the market by December-end or end-March, it was annouced here today.

UCO Bank CMD S K Goel told newspersons here that the timing of the issue will depend upon the market conditions.

He said he expects the market to pick-up by December, the main reason for this being a lower price level.

''The market is gradually picking up and is likely to improve substantially by December,'' Mr Goel said.

However, if the market does not bounce back by the end of year, then the Bank may decide to bring out the issue by the end of the fiscal.

He said although most of the approvals from the government are through, the Bank is deliberately going slow on the issue due to the lacklustre performance of the market.

He said the issue has to be cleared by the Cabinet and saw no hitch in this regard.

While the earlier issue, which was priced at Rs 10 with Rs two as a premium, the follow-on-issue will be priced at a premium of Rs 50 or Rs 60.

This will bring down the equity of the government from 75 per cent to 53.8 per cent following the completion of the issue.

He said the Bank also proposes to return back the government equity of the order of Rs 325 crore at par.

Just a few years ago, UCO Bank was re-capitalise by the government as it was persistently making losses.

The Bank now proposes to return back the equity through issue of preferential shares.

Over the years, the Bank has improved its performance which will enable it to secure a much higher premium of Rs 50 or Rs 60.

The first issue in 2003 could attract only a small amount of premium.

''The Bank has approval to convert Rs 325 crore out of the government's share Rs 800 crore paid up capital into preference shares. This is likely to happen by September-end,'' he said.

UNI GS MP PM1915