BoR plans to sell 5% stake to SocGen

Bank of Rajasthan (BoR) is planning to offer 5 per cent stake to Societe Generale (SocGen) at Rs 85-90 per share.

"In December 2004, we had made a presentation to SocGen. It had shown interest to pick up stake in the bank," said Bank of Rajasthan chairman Pravin Kumar Tayal. However, till now SocGen has not got back to the bank.

"We'll wait to hear from SocGen till March 31. If the bank does not get back to us, we will approach some other entity," said Tayal. On the Bombay Stock Exchange today, the Bank of Rajasthan scrip ended 6.22 per cent up to close at Rs 71.20 against its previous close of Rs 66.70. Tayal said SocGen wanted a controlling stake in the bank.

However, the RBI guidelines do not permit a foreign bank to take over a domestic player. At Rs 85-90 per share, offloading 5 per cent stake will infuse fresh capital to the tune of around Rs 50 crore in the bank, he added.

He also hinted that the price will be revised upwards after March 3. In its next meeting, the board will decide to offer the stake to other players, said Tayal. The bank plans to reduce promoter's holding in tranches through preferential allotments, he added.

After offloading 5 per cent stake, the bank plans to offer another 9.75 per cent stake to two private equity investors.

The bank is thus planning to issue shares equivalent to a 15 per cent stake to foreign institutional investors or strategic partners worth about Rs 130 crore. Sources said Metlong Investment and Development USA Ltd and Citicorp are expected to pick up stake in the bank.