UCO expects capital recast nod in 2 mths

State-run UCO Bank expects the government to clear its capital restructuring plan in the next two months, Chairman and Managing Director S K Goel said from Jodhpur.

The bank will tap the capital market by the end of FY08 or early FY09, once the capital recast plan gets approval, he said.

"We are in advanced stages of negotiation with the government and we expect government to approve our capital restructuring plan in maximum two months," Goel said.

"After the restructuring, the bank's earnings per share will improve, which will earn better return for our shareholders," Goel said.

The bank has sought permission from the government to allow the bank to convert equity capital worth Rs 300 crore to preference capital.

The Kolkata-based bank may raise up to Rs 200 crore via follow-on public offer, he said.

"This year we are comfortable with the capital requirement. Next year, we would need around Rs 200 crore to fund our growth. Depending on the market, we may raise the entire sum through an equity issue," Goel said.

At present, the government's holding in the bank is close to 75 per cent and it has headroom to dilute government's stake by 24 per cent. The minimum government holding in nationalised banks is 51 per cent.