TN: City Union Bank to allot equity shares

Chennai, May 5: The City Union Bank, Kumbakonam would allot 68 lakh equity shares on a preferential basis to a few domestic and foreign investors to shore up its capital base, according to Bank Chairman and Managing Director S Balasubramanian.

Talking to newspersons after the Bank's board meeting here yesterday, he said a decision to this effect was adopted at the meeting. He said it would be placed before the extraordinary general body meeting on June two and has to be approved by the RBI.

He said the Bank had set a target of achieving a turnover of Rs 25,000 crore by 2011.

It was also decided to issue three lakh shares to Larsen and Toubro (at Rs 169.15 per share), in addition to the allotment of 12 lakh shares (at Rs 169 per share) in March 2007 to take up the paid-up capital from Rs 24 crore as on March 2006 to Rs 25.20 crore at the end of this fiscal.

The Board had adopted a differential pricing in the issue of equity shares to institutional buyers that varied between Rs 169.15 and Rs 190 per share.

Apart from L&T, the LIC also was offered 15 lakh equity shares at a concessional offer of Rs 169.15 per unit.

In three months, the paid-up capital of the bank was poised to touch Rs 32 crore after the latest 'capital raising exercise'.

"We have drawn up plans to achieve the net worth of Rs 1,000 crore by 2011 through a two-pronged method - first, internal accruals and profitability are expected to take our net worth from Rs 286 crore as on March 2006 to Rs 586 crore in the next five years," he added.

UNI