LIC to infuse Rs 143 cr in Corporation Bank

State-owned Corporation Bank today said LIC will infuse Rs 143 crore into the bank by way of preferential equity.
The capital infusion into the bank by LIC will be by way of issue of equity shares on preferential basis to the country's largest insurer, the bank said in a BSE filing today.
"The Company (Bank) have received a letter dated September 11, 2015 from Life Insurance Corporation (LIC) of India expressing their intention to infuse capital to the extent of Rs 143 crore into the capital funds of the Bank," it said.
The bank further said it "proposes to raise funds by way of preferential issue of upto 2,81,60,693 equity shares at a price of Rs 50.78 per share (including premium)".

About the objective of proposed preferential issue to LIC, it said the bank is growing at an average growth rate of around 20 per cent over the last many years and it needs funds to expand business.
"In order to meet the growing requirement of funds for expanding the business by way of long term resources and for general lending purposes as may be decided by the Board as also to comply with BASEL-III requirements relating to capital adequacy," it said.

The bank said however that the capital to be raised through this preferential allotment of equity will not be used for making investment, in whatever form, in any of its subsidiaries or joint ventures.

Corporation Bank said it's board has today approved to place LIC's intent of capital infusion in the ensuing extraordinary general meeting scheduled to be held on September 28.
"The existing promoters of the bank i.E. Government of India will continue to vest their control over the bank and there will not be any change in the management/control on the bank as a result of the proposed preferential allotments," it said in the filing.
Earlier, in August, the Centre had decided to infuse a capital of Rs 857 crore into the bank.
Among others 12 other public sector banks including SBI, PNB, Bank of Baroda, Canara Bank will also get the capital infusion from government.

Corporation Bank scrips closed 2.41 per cent higher at Rs 46.80 apiece on BSE today.