UCO Bank to raise Rs 270 cr by issuing preferential shares to LIC

UCO Bank will raise over Rs 270.59 crore by issuing shares to state-owned life insurer Life Insurance Corporation of India (LIC) on preferential basis.

At extraordinary general meeting of the state-owned bank held on Saturday, shareholders approved issuing 7,17,00,000 equity shares to LIC at an issue price of Rs 37.74 per share, UCO said in a regulatory filing.

LIC holds 10.38% in UCO Bank and after the preferential allotment of additional 7.17 crore shares, its shareholding in the bank will increase to 14.50% of the total equity capital.

"Subsequent to the present issue to the LIC, the public shareholding will increase from 19.64% to 23.33% and the shareholding of Government will reduce from 80.36% to 76.67%," it said in the filing.

On the intent of preferential allotment of shares to LIC, the Managing Director & Chief Executive Officer R K Takkar informed shareholders that the bank requires capital for meeting Basel III norms and also to comply with minimum public shareholding norms.

In 2014, Finance Minister Arun Jaitley had said the government would bring down its stake in public sector banks to 52% so as to meet Rs 3 lakh crore capital requirement of the banks and to better serve the agenda of financial inclusion.

UCO Bank stock jumped 2.6% at Rs 33.60 a piece on BSE.