PNB to sell stake to LIC for Rs 1,590 cr

State-owned Punjab National Bank (PNB) today said it proposed to raise Rs 1,590 crore by selling about 15.8 million shares to LIfe Insurance Corporation of India (LIC).

The bank has also approved fund infusion of Rs 1,285 crore through preferential issue of shares to the government.

The board has approved issuance of up to 15.8 million equity shares of face value of Rs 10 each to LIC, on preferential basis, at a premium of Rs 993.69 determined as on February 17 being the relevant date as per the Sebi regulations, PNB said in a statement.

It will also issue up to 12.8 million shares to the government. The capital infusion would raise government's stake, from 58% at present, in the bank.

Following the all necessary regulatory approvals the bank would be able to raise Rs 2,875 crore by March 31.

The bank will hold an extraordinary general meeting of shareholders on March 20 to take up approval for issuing fresh shares to the LIC and the government.

Last year, PNB got a capital infusion of Rs 184 crore from the government.

In 2010-11, the government provided capital support to the tune of Rs 20,157 crore to public sector banks.

Most of the public sector banks got capital support from the government last fiscal. They included Bank of Baroda, Union Bank of India, Oriental Bank of Commerce, UCO Bank and Dena Bank.