BankMuscat offers Rs 188 cr line of credit to Centurion

BankMuscat, the largest bank in the Sultanate of Oman, has opened a Rs 188 crore line of credit to assist Centurion Bank in its inter-bank and trade finance business.

The foreign bank has also agreed to pump in an additional Rs 30 crore into the equity of Centurion, while other financial institutions will pump in Rs 60 crore.

The rights issue of equity shares provided the option of subscribing to two equity shares of the face value of Re 1 for every five shares held by the shareholders at a premium of Rs 3 a share, aggregating Rs 90.8 crore.

The Oman-based bank has also reiterated that it will fully exercise its rights option and participate to the total extent of its shareholding in the forthcoming Centurion Bank rights issue, along with other major investors "" Keppel, Sabre and ADB.

The issue is being offered to existing shareholders at Re 1 a share plus Rs 3 premium and Bank Muscat will subscribe to 75 million shares to constitute a total investment of Rs 30 crore.

The bank holds as much as 33 per cent in Centurion, while ADB holds another 4.07 per cent. Keppel holds around 14.45 per cent followed by Sabre at 7.82 per cent.

Abdul Razak Ali Issa in a release said, "As the largest shareholder, our decision to fully subscribe to the forthcoming rights issue is in keeping with our long-term commitment to India and the confidence we have in the new management. The bank has shown excellent progress over the past year and with RBI recently granting permission to further expand its presence in the country, we are confident that the bank is on a positive growth path and will have much to offer to retail customers."