City Union to raise Rs 125 cr via pref issue

MUMBAI: Private sector lender City Union Bank today said it has received shareholders' approval to raise over Rs 125 crore by allotting equity stakes to a clutch of domestic and foreign investors.

The preferential issue of shares is subject to approval from the Reserve Bank of India (RBI), the Tamil Nadu-based bank said in a communique to the Bombay Stock Exchange (BSE).

Shareholders accorded their consent for preferential issue of shares at the Extra-Ordinary General Meeting held on June 2, it added.

Around 15 lakh shares are proposed to be allotted to state-run LIC and three lakh shares to Larsen and Toubro (L&T) on a preferential basis at Rs 169.15 per share (including premium) -- raising Rs 30.44 crore.

L&T already holds 4.76 per cent stake in the bank, according to shareholding information filed by the company for the March quarter.

The lender would get another Rs 95 crore from issuance of equity shares on preferential basis to Nederlandse Financierings - Maatschappij voor Ontwikkelingslanden NV (15 lakh shares), Ares Investments (12.50 lakh shares), Argonaut Ventures (12.50 lakh shares) and Yatish Trading Company (10 lakh shares).

The price of the second tranche is higher at Rs 190 per share including premium.

Shares of City Union Bank dropped 0.78 per cent and were last trading at Rs 198 on the BSE.