(Mint)
(Mint)

PNB to raise up to 10,000 crore from non-core asset sale, rights issue

  • PNB is expecting a write-back of 4,000 crore from Essar Steel and Bhushan Power and Steel which are undergoing resolution under the insolvency
  • PNB CEO Sunil Mehta said the bank would raise 5,000 crore through rights issue or QIP route

Mumbai: State-owned Punjab National Bank (PNB) is looking to raise 10,000 crore in 2019-20 from sale of non-core assets, rights issue and expected write-backs from two large accounts undergoing insolvency proceedings.

The lender is expecting a write-back of 4,000 crore from Essar Steel and Bhushan Power and Steel which are undergoing resolution under the Insolvency and Bankruptcy Code.

"For FY20, we are looking to raise 10,000 crore. We are expecting 1,000 crore from sale of non-core assets, 4,000 crore write-back (from) two accounts (Essar Steel and Bhushan Power and Steel) and 5,000 crore from markets," the bank's managing director and CEO Sunil Mehta told reporters.

The bank expects to raise 600 crore from sale of its erstwhile headquarters, situated at Bhikaji Cama Place in South Delhi, to the income tax department. The deal is in the final stage.

It is also planning to raise 400 crore by selling some real estate properties.

Mehta said the lender would raise 5,000 crore through rights issue or qualified institutional placement (QIP) route.

The bank has set a recovery target of 20,000 crore in the current financial year.

In 2018-19, its recovery more than doubled to 20,000 crore from 9,666 crore in 2017-18.

The bank narrowed its loss by nearly 65% to 4,750 crore during the fourth quarter of fiscal ended March 2019. Its net loss was at 13,417 crore in the same quarter of 2017-18.

Gross non-performing assets (NPAs) improved to 15.50% from 18.38% at the end of March 2018.

Net NPAs also came down to 6.56% as against 11.24% in the year-ago period.

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