UCO Bank trims issue size to 6 cr shares

Posted:FE: Agencies: Mar 23, 2010 at 1456 hrs IST



New Delhi: State-owned public sector lender UCO Bank said it has cut down the issue size to 6 crore shares of its proposed follow-on offer (FPO), expected to hit markets in May.

"We have cut down the shares size now and are going in for only six crore shares issue against the earlier proposed size of 13.5 crore equity," UCO Bank Chairman and Managing Director S K Goel said in New Delhi.

At the current market price, the bank would be able to raise about Rs 400 crore from the public offer.

The board, in its meeting on January 30, decided to issue 6 crore equity shares with a face value of 10 rupees each at a suitable premium for raising funds.

The bank intends to come out with the public offer in May. Post FPO, the government holding will come down to 58.6 per cent from the existing 70 per cent.

Shares of the bank were trading at Rs 56.80, up 1.88 per cent during the afternoon trade on the Bombay Stock Exchange.

Asked about capital infusion, he said, during the month the bank expects to get Rs 500 crore from the government.

This would help the bank in raising its capital to risk-weighted asset ratio (CRAR) over 12 per cent, he said, adding that the government would infuse capital in the next fiscal as well.

However, as per the supplementary demands of grant tabled in Parliament recently, UCO Bank would get Rs 450 crore during 2009-10.

According to the supplementary demands of grant the government would make a capital infusion of over Rs 1,200 crore in three public sector banks including, UCO Bank, United Bank of India and Central Bank of India.

Of the total, UCO Bank and Central Bank of India would get Rs 450 crore each while United Bank of India, which recently went for an initial public offer, would get financial assistance of Rs 300 crore.

Last fiscal (2008-09), the government infused Rs 1,900 crore as Tier-I capital in four public sector banks namely Central Bank of India, UCO Bank, Vijaya Bank and United Bank of India to maintain a comfortable level of capital to Risk Weighted Asset Ratio.