Debt-Equity Swap Option In Gtb Tier-Two Issue

Global Trust Bank is planning to issue international subordinated debt with an option to convert it into equity. The issue of subordinated debt will better the capital adequacy ratio of the bank, which has witnessed rapid growth in its loan book.

The Global Trust Bank board is meeting on February 20 to clear the raising of subordinated unsecured convertible loan of US $5 million for International Finance Corporation(IFC).

The loan will carry an option to convert part or whole of the outstanding into fully paid equity shares of Rs 10 each at a premium as may be decided by the Board. It will be subject to guidelines of Securities and Exchange Board of India (Sebi) and Reserve Bank of India(RBI).

 

The rapid expansion of the asset base of Global Trust has prompted the issue of tier-two capital. The advances made by the bank have grown to Rs 1754 crore as of December 31, 1997, up from 1462 crore on March 31, 1997.

The deposit base stood at Rs 2811 crore as on December 1997. GTB posted record net profits of Rs 59.45 crore for the first nine months period ended December 31, 1997.

The profits have grown by 38 per cent over March 31, 1997, on an annualised basis. The gross profits were Rs 101.22 crore for the nine month period as against Rs 103.86 crore for the full year ended March 31, 1997.