The International Finance Corporation (IFC), the private sector funding arm of World Bank, is set to pick up about 4-5% stake in Mangalore-headquartered Karnataka Bank. The bank’s board is meeting on Friday to decide on a preferential allotment to IFC.
A senior Karnataka Bank official confirmed the development but said pricing details and quantum of stake has not been decided as yet.
Karnataka Bank could be the second Indian bank where the 51-year old World Bank arm has an equity stake. IFC holds 4.99% stake in Federal Bank.
Karnataka Bank had raised Rs 120 crore in June by way of a tier-II bond issue. The bank had gone in for a rights issue (at the ratio of one share for every two shares of post-bonus share capital) at Rs 20 per share (Rs 10 premium) in 2004.
As of June 30, some of the leading institutional shareholders in Karnataka Bank include — Oppenheimer Funds (Oppenheimer International Small Company Fund) with a 4.94% stake, Citigroup Global Markets (Mauritius) 4.34%, UTI Mastershare scheme 1.65%, Franklin Templeton Investment Fund 3.09% and Quantum MF with 3.73% stake.
Post preferential issue, the bank’s capital adequacy ratio(CAR) would rise to 13% from the current 12.72% and help it meet the funding needs up to September 2008.
(Source: Economic Times)
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