The Centurion Bank board meet on March 29 will, among other things, also discuss the status on the recasting of the equity structure of the bank.
Sabre Capital Worldwide, a global fund floated by former Standard Chartered Bank group chief executive officer Rana Talwar along with other funds are looking at investing in the bank.
Jayant Dang, a director on Centurion Bank board and a senior official of Asian Development Bank (ADB) had met Reserve Bank of India brass early this week. Dang, had on March 6, too led an ADB team to meet the RBI brass to discuss the recasting of the equity structure of the bank.
Even as the board is meeting on March 29 the final decision on capital infusion is unlikely to take place. Sources said that there have been rounds of meetings between Sabre and the existing investors in the bank.
The major foreign stakeholders in the bank are Keppel Bank (around 17.71 per cent), ADB (10.22 per cent) and IFC (8 per cent). These existing investors along with Sabre is expected to bring in fresh equity of around Rs 175 crore into the bank.
Three to four other global funds including a Citi group venture fund and Chrysalis Capital had teamed up with Sabre for investing in the bank. However sources said that as Chrysalis and Citi had invested in UTI Bank they are unlikely to invest more funds into Centurion Bank.
Sabre had appointed Ambit Finance as the merchant bankers while the due-diligence on assets and tax matters were done by KPMG. KR Ramamoorthy the former chairman of Vysya Bank had done the due diligence on the corporate book on behalf of Sabre. DSP Merrill Lynch is the merchant banker on behalf of Centurion Bank.
Centurion Bank is likely to be the first bank to benefit from the proposed relaxation of foreign direct investments (FDI) in the banking sector.
The recent budget has proposed to raise the cap on FDI in private sector banks from 49 per cent to 74 per cent. The current FDI stake in the bank is at 36.80 per cent and the relaxation in FDI would help the bank.
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 TCFC Finance shares.
Sabre and the other funds which are investing in the bank would need to buy the 26 per cent stake which were pledged by Dev Ahuja
