Centurion Bank advanced further on Thursday on reports that Sabre Capital is set to gain control over it through a complex transaction, that will involve the merger of Bank of Muscat's Indian operations with the private sector bank.
The bank's stock surged by 6.18% to Rs 9.45 on the BSE in early-noon trades.A substantial volume of over 3.08 lakh shares was recorded on the counter by 12:20 IST. The stock has now jumped 14.5% from Rs 8.25 on 21 April 2003. Earlier, between 7 and 21 April 2003, the stock had shed 17% from Rs 9.95.
Centurion Bank scrip rallied on reports that the bank may finalise an equity acquisition deal with Sabre Capital. According to reports, Sabre Capital and Bank of Muscat, along with a few other investors, have plans to pick up a controlling stake in CBL and also make a capital infusion through a rights / public issue of equity shares. The infusion is likely to be made in two phases - of Rs 319 crore. The infusion of funds is likely to take the bank's capital adequacy ratio to 10%. The bank's CAR for the first quarter of 2002-03 was at 4.05% as against the Reserve Bank of India's stipulated 9%.
CBL is reducing a part of its capital as part of the restructuring process. Reports revealed that the recast package has already got the RBI's in-principle approval.
The 26% equity stake pledged by CBL promoter Dev Ahuja's 20th Century Finance Corporation to settle his obligations to the bank is likely to be sold by CBL in due course of time. But the shareholding pattern after the first phase of capital restructuring will be as follows: Dev Ahuja's holding would come down from 26% to 5.5%, Keppel Tatlee Bank, Asian Development Bank and International Finance Corporation's holding would come down to 16% from 36.5%, while Sabre will hold 48%. Public holding will also come down from the current 37.5% to 30.5%.
Incorporated in June 1994, CBL was promoted by the erstwhile 20th Century Finance Corporation and associates in association with Keppel Tatlee Bank (which was earlier Keppel Bank of Singapore). CBL's focus so far has been on growth-oriented, higher end, medium-sized and emerging blue-chip companies in the corporate sector through a variety of products and services. It also has a keen interest in the retail sector. The bank is also into international businesses encompassing both fund-based and non-fund based assistance to corporate and institutional clients.
CBL provides various services like ATMs at all its branches, computer terminals at selected customers' premises, facility of operating account from any of the bank's branches, instant transfer of funds, speedy collection of financial instruments, etc. It is being positioned as a professionally managed bank with presence in all major financial and growth centres. The bank plans to increase its focus on retail customers and raise the portfolio of retail assets to 50% from the current 35%.
CBL has 57 branches, 17 extension counters, 135 ATM's and a strong retail base of around 5 lakh customers.
For the third quarter ended 31 December 2002, CBL recorded a net profit to Rs 3.10 crore as compared to a net loss of Rs 26.04 crore in the corresponding period of the previous year.
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