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Wednesday, February 24, 2010

SBI may raise up to Rs 20,000 cr via rights

State Bank of India plans to raise Rs 10,000-20,000 crore in the next fiscal through a rights issue and is in discussion with the Government, its principal shareholder, said Mr O.P. Bhatt, Chairman.

“We need to raise equity in the next fiscal. We have a ceiling of Rs 20,000 crore. We may raise anywhere between Rs 10,000 and Rs 20,000 crore in the next fiscal,” Mr Bhatt said, while speaking to reporters on the sidelines of the CII Banking Tech Summit, here on Wednesday.

However, he pointed out that the bank has no immediate requirement of capital as it is fairly well capitalised with a capital adequacy ratio of 14 per cent.

Mr Bhatt expects the Government to make some announcement about the fund raising in the Budget on Friday.

Over the next five years, the bank would require Rs 40,000-50,000 crore. However, the timing will depend on the group's requirement for funds and the prevailing market conditions. SBI would need funds for any acquisitions it may go in for in the future or to meet the requirements of its subsidiaries, including the insurance subsidiaries.

“In the next five years, in addition to Tier-II capital and retained earnings, we may require Rs 40,000-50,000 crore. But this number could change,” Mr Bhatt said.

“If we can raise even half of this in the next 12-18 months, it will be great,” he said.

On spends to build IT infrastructure, Mr Bhatt said that 60-70 per cent of the bank's capital expenditure is on account of IT. He pointed out that the bank will invest thousands of crores of rupees in the coming years to build up its IT infrastructure though he declined to put a specific number to the future spends.

SBI is installing 1,000 ATMs every month. Necessary infrastructure has to be set up for mobile banking. It is also undertaking a data warehousing project. It also plans to establish a gateway to integrate all the payments process. Expenditure will also be incurred to upgrade the bank's network and set up risk management practices, Mr Bhatt said.

Saturday, February 20, 2010

Reliance submits revised offer for LyondellBasell: Sources

India's largest private gas refiner, Reliance Industries is still in the race for LyondellBasell, reports CNBC-TV18, quoting sources. The company meets the February 19 deadline by submitting an updated offer for LyondellBasell. The revised offer comprises a marginal hike, a slight tweaking of its December 2009 proposal.

RIL's December proposal, which sought strategic stake and majority voting rights, valued LyondellBasell at USD 13.5 billion.

But earlier this week, the bankrupt petrochemicals maker settled a dispute with creditors, paving the way for an exit from bankruptcy. The enterprise value of LyondellBasell is now pegged at a minimum of USD 14.5 billion.

After IPO, United Bank to get new CMD

Post-IPO Kolkata based United Bank of India is set to get a new head as present chairman and managing director SC Gupta will retire by end of this month. Sources said Bhaskar Sen is likely to become the new chairman and managing director, just after the bank completes its initial public offer.

Bhaskar Sen, who had joined Dena Bank in 2007 from Union Bank of India, where he was working as general manager, headed new businesses of the bank.

Sen also looked after overseas expansion and strategic initiatives of the bank.

According to UBI insiders, Sen’s overseas experience would help the bank’s foreign operations. In fact, UBI started a representative office in Bangladesh a few weeks back and is planning to upgrade that into a branch in six months.

The bank is also planning to have a representative office in Myanmar and already has tie ups with four government banks in the country.

Meanwhile, the bank has received exemption from the Securities and Exchange Board of India (SEBI) for appointment of independent directors before its initial public offering (IPO) of shares.

“We have explained to SEBI that it might take sometime before we fill the quota of independent directors and have given an undertaking that we will keep them informed as and when we appoint them," TM Bhasin, UBI’s executive director, said.

The bank has already applied to the government of India for appointment of four more independent directors. At present the bank’s board of directors comprises seven directors of which two are only independent directors.

A delay in recruiting independent directors might have cost the bank dearly. In such a case the bank would have to continue to be in non-compliance of the corporate governance requirements of the listing agreement.

''We have to recruit two more directors and one shareholders' representative into the board,'' Bhasin said.

UBI’s IPO of 5,00,00,000 equity shares of face value of Rs 10 each will open on February 23 and close on February 25.

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