Canara Bank, which dropped plans to sale 30 per cent in Canfin Homes, expects to generate about Rs 4.5 billion through offloading stake in Canbank Factors and Computer Company as well as real estate in 2018-19.
The process of finding buyer for stake in Canbank Factors is underway and hope to conclude transaction in the current quarter (Q1Fy19), Rakesh Sharma, managing director and chief executive, Canara Bank told Business Standard. The public sector lender holds 70 per cent stake in factoring company.
According to rating agency CRISIL, the company's factoring turnover was Rs 8.6 billion for the half year ended September 30, 2017. It gross Non-performing assets stood at Rs 2.19 billion. The Gross NPAs, as a percentage of gross advances stood at 39.3% as on September 30, 2017.
Canbank Factors had net worth of Rs 1.44 billion and Tier-I and overall capital adequacy ratio (CAR) of 16.63% and 16.90%, respectively, of risk-weighted assets as on September 30, 2017.
Canara Bank is contemplating a number of steps to augment its capital position. As part of this process, the bank had considered sale of equity stake in subsidiaries, including that in Canbank Factors.
Besides, factoring company, bank is also looking at selling holdings in Canbank Computer Services Ltd, Sharma said. He, however, did not elaborate on extent of stake would be sold.
Bengaluru-based lender would also sale some real estate assets spread over country as part of asset monetization. The proceeds from real estate and stake sale in factoring and computer services company are expected to be about 4.50 billion, bank executives said.
Since the quote received was not in tune with the valuation, Canara Bank has decided to call off divestment process of it entire stake in Canfin Homes. Canfin Homes Ltd’s loan book was Rs 150.6 billion at end of December 2017.
Housing Finance Company has network of 132 branches, 20 Affordable Housing Loan Centres (AHLCs) and 20 satellite offices with customer base of over 120,000.
In December 2017, Canara Bank informed stock exchanges that it will offload 4 per cent stake in Canfin Homes Ltd (CFHL). After the transaction, the bank's holding in CFHL would have reduced to 26 per cent. However, later it informed that it has not accepted bids from empanelled merchant bankers and it will divest its entire stake in the company.