Sabre Capital Worldwide, a global fund floated by former Standard Chartered Bank group Chief Executive Officer Rana Talwar, is not alone in the pursuit of a stake in Centurion Bank.
Talwar's fund is believed to have teamed up with a Citi group fund and two other global funds, including Chrysalis Capital, for the Centurion Bank stake.
These four funds collectively are likely to invest around Rs 175 crore in the bank by the end of the financial year.
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Talwar was also one of the vice-presidents and a policy committee member of Citicorp prior to joining StanChart.
Sources said Sabre was seen to be acting as the lead manager for the group of four funds that are keen to invest in the bank. KPMG is doing the due diligence on Centurion Bank for one of the parties involved.
Sources pointed out that a confidentiality agreement had been signed between these funds, on the one hand, and the bank, on the other. According to the terms of the agreement, the funds will have to make an offer, after the due diligence, within a price range of Rs 10-12 per share.
These funds are looking at various options for investing in the bank. This is likely to be through a combination of preferential issues as well as sale of the erstwhile Twentieth Century Ltd shares.
Centurion's current capital adequacy ratio is around 3 per cent. The funds are likely to bring in around Rs 175 crore to shore up the Tier I capital and increase the capital adequacy ratio to around 9 per cent.
When contacted, Centurion Bank Chairman and Managing Director V Janakiraman refused to comment on the development. Janakiraman had in a statement last week said Sabre Capital Worldwide Inc was to commence an exclusive due diligence on the bank on December 7. It is expected to complete the due diligence by the end of this month and will
The major foreign stakeholders in the bank are Keppel Bank (around 17.5 per cent) through Kephinance Investment (Mauritius) Pte Ltd, the Asian Development Bank (10.22 per cent), and the International Finance Corporation (8.36 per cent).
Dev Ahuja, the former promoter of the bank, holds around a 5 per cent stake. Ahuja had given up his rights to another 26.2 per cent stake in the bank held through Twentieth Century Finance Ltd, which in turn had authorised the bank to sell the stake to a strategic investor.
Centurion Bank had, as part of a massive financial clean-up operation, booked a loss of Rs 161.84 crore for the year ended March 31, 2002. In the first half of the current financial year, the bank posted a net loss of Rs 17.06 crore.