Indian Overseas Bank to seek EGM approval on Dec 16, 2013 to raise funds

Government of India - Ministry of Finance - Department of Financial Services have conveyed their decision to infuse capital funds to the Bank to the extent of Rs. 1200 crore and advised the Bank to take all preparatory steps in this regard.

Accordingly the Board of Directors of the Bank at its meeting held on November 11, 2013 has considered and approved the proposal to issue Bank's equity shares of face value of Rs. 10/- with premium on preferential basis to Government of India and LIC of India (under its various schemes) up to an amount of Rs. 1626 crore (including premium).

The Board approved proposal to issue perpetual bonds to the extent of Rs. 2497 crore and to authorize our CMD to fix the size of the issue and finalize the terms and conditions including fixation of coupon rate depending upon the market conditions. CMD may further be authorized to take necessary required actions in connection with issue of perpetual bonds either domestically or overseas.

The Board also approved proposal to constitute a Committee under the name and style of "Committee of Directors for Preferential Issue of shares" and delegated the powers to fix the price and approve the agenda to the committee.

The committee will fix the issue price of shares in accordance with SEBI /ICDR Regulations and determine the number of Shares to be issued to Government of India Rs. 1200 crore (including premium) and LIC Rs. 426 crore (including premium) and finalize the agenda and approve the EGM Notice to be issued to Shareholders.

The committee will create, offer, issue and allot equity shares of Rs.10/- each (Rupees Ten only) for cash at such Issue Price as may be determined by the Committee of the Board in accordance with Regulation 76 (1) of SEBI ICDR Regulations aggregating (including premium) on receipt of funds from Government of India and LIC and its various schemes not exceeding Rs. 2100 crore and also carry out all other matters incidental thereto.

The Board also considered and approved the convening of an Extraordinary General Meeting (EGM) of shareholders of the Bank on December 16, 2013 at Chennai for obtaining approval from shareholders for the aforesaid proposal.

Shares of Indian Overseas Bank was last trading in BSE at Rs.50.20, down by Rs.1 or 1.95%. The stock hit an intraday high of Rs.51.85 and low of Rs.50.

The total traded quantity was 1.32 lakhs as compared to 2 week average of 1.51 lakhs.

Source : Equity Bulls

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