Dutch firm FMO sells 4.32% stake in City Union Bank for Rs 148 crore

CHENNAI: Dutch multilateral lending agency Nederlandse Financiearings Maatschappi Voor Ontwikkelingslande N.V. popularly known as FMO has sold its entire 4.32% stake in Kumbakonam-based City Union Bank for nearly Rs 148 crore, making over four times return on its over 6 years investment.

According to the bulk deal data on BSE, FMO sold its entire 2.34 crore shares in City Union Bank for Rs 63 a share. Lavender Investments bought 2.21 crore shares in the deal, while buyers of the remaining stake was not immediately known.

In 2007, City Union Bank allotted 68 lakh shares on preferential basis to a set of six investors including L&T, LIC, FMO, Ares Investments, Argonaut Ventures and Yatish Trading company. Out of this, FMO was allotted 15 lakh shares at Rs 190 a share.

FMO’s holding ultimately increased to 2.34 crore shares through two rights issues.

As per March 2014 shareholding, FMO was the second biggest institutional holder in the bank after L&T which holds a 4.55% stake. Other big investor in the bank include LIC which owns 3.99% stake.