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| UCO Bank restructures equity capital |
| Press Trust of India / Mumbai Dec 30, 2008, 20:34 IST |
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Kolkata-based UCO Bank has restructured its equity capital by reducing it by almost one-third from the current level of around Rs 800 crore, a move that would help the bank attract more investors.
The PSU lender will convert Rs 250 crore of equity out of the total of Rs 799.36 crore to perpetual non-cumulative preference shares (PNCPS), the bank informed the Bombay Stock Exchange.
PNCPS is a kind of hybrid capital, which is deemed to be share capital but does not form part of equity capital.
As such, the equity capital of the bank stands reduced to Rs 549.36 crore post-restructuring.
After the restructuring, the government holding in the bank has come down to 63.59 per cent from 74.98 per cent.
It will raise earning per share (EPS) of the bank and enable it to attract investors.
Earlier in October, the Cabinet gave go-ahead to the restructuring of the bank's capital.
While approving the restructuring in October, then Finance Minister P Chidambaram had said the move will help in attracting more investors.
"Reduction in pure capital will improve the EPS and other financial (indicators) so that the bank has more attractive capital structure," the minister had said.
He had said the bank had the highest equity among all the listed state banks, which was suppressing the bank's earning per share and making it difficult for the bank to service the high proportion of equity.
Earlier, UCO Bank had plans to come out with follow-on public offer, subject to capital restructuring and market conditions.
UCO Bank share closed at Rs 27.25, up 0.93 per cent on the BSE today.
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