The Hindu Business Line : UTI Bank to make allotment to AIG

THE UTI Bank is set to make a preferential allotment of fully convertible debentures, not exceeding Rs 50 crore to the Infrastructure Fund of AIG as part of the move to cut the stake of its promoter, UTI to 40 per cent in the bank.

The debentures when fully converted by June 30, this year at a fixed price of Rs 60 per share on allotment will signal a placement of close to five per cent of the bank's equity with the private equity fund.

In September last year, two funds owned by CDC Capital Partners, managed by the multilateral funding agency, Commonwealth Corporation bought a 26 per cent stake for a consideration of Rs 156 crore. The preferential allotment was made at Rs 34 per share, resulting in a dilution of the UTI's holding to 44.88 per cent. With the proposal to issue convertible debentures to AIG, UTI Bank will now be well in line to comply with the RBI directive to limit the holding of the promoter group in a bank to 40 per cent, a senior bank official said.

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