New Delhi: Public sector UCO Bank’s proposal to raise money through a follow on public offer may be delayed by over a year, as the government is unlikely to clear capital restructuring plan of the bank this fiscal.
“The capital rejig proposal is under active consideration but it would take some time before it is finalised,” an official source told PTI.
The bank would have to delay its capital raising plan by 1-1.5 years, he said.
Subsequent to tweaking the capital structure, the bank intends to raise money from FPO to meet its credit needs and expansion plan. Conversion of capital into preference shares would allow the bank further headroom for raising resources, he added.
The Kolkata-based bank has a capital base of Rs 800 crore, of which Rs 600 crore is held by the government and the remaining by public and financial institutions. The paid-up capital is higher than that of State Bank of India and Punjab National Bank.
“A part of equity capital would be converted in to preferential shares as per the RBI norms, the official said.
At such a high base, the bank’s Earning Per Share is not very attractive and would not help the bank to raise significant amount of capital. So, in the larger interest of the bank, the decision would be taken on restructuring its capital so that it has less paid-up capital, the source said.
Shares of the bank were trading at Rs 84.05, up 3.13% on the BSE.